Capgemini Global BPM Report

Business Process Management The way we see itGlobal Business ProcessManagement Report

Contents Foreword 3 About the study 4 Executive summary 6 The key to BPM success: BPM as a C-level concern 8 How may I help you? The key benefits of BPM 10 Cost efficiency 10 Business agility 12 Compliance 14 Customer-centricity 15 Social media strategy 19 Staff satisfaction 20 Show me the money: BPM and Return on Investment 21 Speculating to accumulate: BPM as a counter-cyclical investment 23 Barriers to BPM implementation 25 Key conclusions and recommendations 29 Capgemini sector and country focus 32 Financial services 33 Public sector 36 Manufacturing, automotive and life sciences 38 Consumer products and retail 40 Telecommunications, media and entertainment 42 United Kingdom 45 United States 46 Australia 47 Germany 48 Italy 49 France 50 Spain 51 Nordic Region 52 Netherlands 53 Acknowledgements 542

ForewordWelcome to the Capgemini Global BPM become an integral and barriers to success. ManagementBusiness Process Management key part of this proposition. of change in such endeavours is a(BPM) Report. This report is an key part in enabling the appropriateexploration of key trends in BPM as Business Process Management is alignment of business and technologyseen by CXOs across a broad selection becoming ever more relevant to both to support their transformationof sectors and geographies. BPM large and small organizations in the efforts. I hope that you find this reportis perhaps at a tipping point – it’s current economic climate. At a time of benefit in the further adoption ofcertainly at an exciting stage in its when many different market sectors are Business Process Management.evolution. As both an engineer and facing slow revenue growth, customeran Operational Research practitioner churn and increased pressuresin my early career, and subsequently on costs, BPM becomes a criticalas a consultant, I have seen BPM weapon in the battle for efficiency Bob Scottthrough its development over the and effectiveness in processes. Senior Vice Presidentlast 26 years. BPM has its roots in Furthermore, in a challenging and Global Head of BPMmanagement practices such as Total changing business environment CapgeminiQuality Management, Business that is characterized by uncertainty,Process Reengineering & Model Based it allows organizations to adapt, beDevelopment; but the advent of the new more agile and fleet of foot. Capgeminigeneration of sophisticated modelling are seeing strong demand for BPMand process execution technologies services in markets such as USA,has greatly enhanced BPM’s power UK, the Netherlands and France;to truly transform businesses. This and there are clear signs of increasedhas created one of the most rapidly interest in other geographies such as,growing and attractive market sectors Germany, Sweden, Spain, Italy andfor both services and technology. We Australia. In sector terms, the financialsee BPM as a critical management services industry has led the way indiscipline that when executed against BPM adoption over the recent past,clear, cross organizational business driven by increased focus on customer-objectives, can deliver exceptional centricity and regulatory compliance.value to that organization. However, Other sectors, public sector, utilities,we also see that the potential for BPM telco, retail and manufacturing are nowis not well understood. Our decision to not only catching up, but are startingconduct this global survey was driven to use BPM in new ways to create newby our discussions with our clients, business models to serve customersto understand their current position, and outsmart the competition.their understanding, how its valuewas measured, how it is used and The research findings also showprioritized within their Business and however that this is a complexTechnology Transformation efforts. landscape, and we are not seeing adoption of BPM in a clear andThis research confirms our belief consistent way. This report also looksthat BPM needs to be a jointly owned at some of the barriers to adoption,Business and IT discipline. It also with organizational silos being ademonstrates that it is starting to gain major obstacle. Waters are furthersignificant traction in the market muddied by fragmented budgets, lackand investments are starting to pay of clear governance and ownershipdividends to the early adopters. At and internal politics. The objectiveCapgemini we are being asked by of our investment in this researchour clients to help them simplify project was to shed some light onand improve their business models these elements with a view to assistingand the technology that supports organizations to create strategies thatthem and we are already seeing avoid or at least mitigate some of these3

About the studyCapgemini worked with FreshMinds, Only participants from firms with The second, qualitative phase of thea UK-based research firm, to conduct more than 1,000 employees were research comprised a series of in-depththe primary research for this study. eligible for the survey. 55% of survey qualitative interviews with seniorThe research process consisted of participants were drawn from business and IT professionals drawntwo complementary phases. enterprise companies with 10,000+ from the networks of both Capgemini employees, 16% from large companies and FreshMinds Research. TheseDuring the initial quantitative phase with 5,001-10,000 employees and individuals were selected to representof the research, a 30 minute online 29% from mid-size companies a cross-section of geographies andsurvey was completed by over 1,100 with 1,001-5,000 employees. sectors, and were selected for theirCXOs, senior business managers, IT practical experience of Businessdirectors and managers, and other Respondents were drawn quite Process Management initiatives.senior business decision-makers. evenly from 11 markets: In each section of the report, ourAll major industries were • Australia insights are based on the quantitativerepresented in the study: findings from the primary research, • Brazil illustrated by graphical representations• Distribution and transport of the data. These are supported and • France illustrated by anecdotal findings• Financial services and quotations from the qualitative • Germany interviews that comprised the• Public sector secondary phase of the research. In the • India sections labelled ‘Capgemini view’ we• Manufacturing, automotive have added supplementary analysis and life sciences • Netherlands that is drawn from our consultants’ experience of working on BPM projects.• Education and science • Italy• Consumer products and retail • Spain• Telecommunications, media • Nordic Region and entertainment • UK• Utilities, energy and chemicals • USA• Professional services• Healthcare4

Global Business ProcessManagement ReportExecutive SummaryCapgemini’s Business Process Management research examinescurrent practice in BPM, the benefits being achieved and thebarriers to success. A key theme is the relationship betweenexecutive-level sponsorship of BPM and its success.The purpose of our research is to survey respondents who have both say that their business processes arehelp organizations understand what knowledge and practical experience either “managed” or “optimized” − theis involved in realizing the benefits of the topic, 82% believe that BPM top two levels of process maturityof BPM, and avoid the pitfalls that should be treated as a C-level concern. as defined by our maturity model.many have already encountered. There is a correlation between processBPM has an increasingly high profile, maturity and treating BPM as a C-levelwith a growing belief among large topic. 68% of survey respondentsorganizations that BPM should who state that BPM is an importantbe sponsored at a senior level. Of agenda item at managerial level alsoThe Capability Maturity Model provides a framework for understanding where our clients fit in terms of their adoption of BPM, and thepotential roadmap for further development. The model was first developed by the Software Engineering Institute of Carnegie MellonUniversity. 1 Repeatable Managed The process The process is deliberately is at least managed in documented accordance with sufficiently agreed upon metrics The process Process The starting management point for use is defined / confirmed includes of a new or deliberate process undocumented as a standard business optimization / repeat process improvement process Initial Defined Optimizing 1 http://en.wikipedia.org/wiki/Capability_Maturity_Model6

Figure 1. There is a clear correlation between prioritization of BPM adoption within a The research highlightedbusiness and improved performance of processes. practical issues which must beWhich of the following best describes the level of process maturity within your organization? overcome in order to implement BPM successfully, notably: Total Respondents who indicated “Currently Business Process • Functional silo culture Management is an important agenda item at managerial level” • Fragmented budget • Perception of BPM as an IT matter • Resistance to BPM from IT staff who have responsibility for existing systems • A lack of readiness or willingness to tackle the change6.8% 1.7% 15.9% 11.4% 27.3% 18.8% 23.6% 38.9% 15.8% 28.8% 10.7% 0.4% management issues associated with BPM implementations Initial Repeatable Defined Managed Optimizing Don’t know To overcome these barriers, strongOverall, just 16% of respondents customers reported a positive impact leadership (including C-levelbelieve that their organization’s on the business. A similar proportion of involvement) plus a clear vision areprocesses are currently at the those whose objective was to improve needed. Another requirement for“optimized” level, but more than ever compliance and risk management successful BPM implementation is thatbefore, companies are recognizing observed a beneficial impact. Specific companies must be willing to breakthe opportunity that BPM presents benefits of BPM adoption which came with the past and embrace change.to improve process maturity. 45% of through strongly were improved staffparticipants in the survey anticipated satisfaction and greater efficiency. Positioning an organization forthat their organization’s interest in BPM requires some effort, but theBPM would increase over the next 12 positive experiences of those whomonths. This finding confirms that participated in the research suggestBPM is increasingly becoming a part of that it is a step worth taking.mainstream management thinking.There is compelling evidence that Figure 2. 45% of respondents anticipated that their organizations interest in BPM wouldBPM can deliver tangible business increase in the next 12 months.value. 96% of those who had tried How do you anticipate that the current level of interest in BPM within your organization willto measure ROI from their BPM change over the next year?investment reported a positive return,with 55% measuring a return of at The same amount Don’t know A lot moreleast twice their initial investment. emphasis of emphasisThis may explain the finding thatin challenging economic times, 13.8% A little more 19.9%investment in BPM becomes more, emphasisrather than less, attractive. 68% ofrespondents stated that a more difficult 28.0%business outlook than expectedwould lead to their organizationplacing increased emphasis on BPM. 3.0% 30.8%The benefits of BPM vary depending 4.6% A lot less emphasison the organization’s objectives, aswell as its level of maturity. More than A little less emphasisthree-quarters of those respondentswho had introduced a BPM initiativewith a view to improving relations with7

The key to BPM success:BPM as a C-level concernThe more Executives know about BPM, the more likely they areto believe that it should be regarded as a C-level concern. 82% ofparticipants who have both knowledge and practical experience ofthe topic believe it should be part of high level business strategy. This is in stark contrast to the 20% of BPM rather than being of respondents who say that BPM is hampered by the existing currently treated as an important technologies. Strong BPM agenda item at managerial level within leadership at a strategic and their organization. At present, a lack tactical level is essential for of senior sponsorship means that long-term BPM success. only a minority of companies are reaping the full benefits that Business It should be noted that while Process Management can bring. These strong BPM leadership is benefits are discussed in greater detail important, it is not sufficient. in the next section of the report. Programs often fail because of a lack of day-to-day governance. Capgemini view This can lead to an insufficient framework to address competing To be successful, BPM needs to requests for limited resources, address organizational silos. In differing objectives and timescales. order to allow this to happen, executive sponsorship at enterprise level is essential. It is important for C-level decision-makers to focus on the business outcomes Figure 3. Respondents who have the greatest knowledge of BPM are significantly more likely to believe it should be treated as a C-level concern. Do you consider BPM to be a C-level concern? “Percentage of respondents indicating ‘Yes’” 82.0% 60.6% Respondents indicating “I know a lot Total Respondents about Business Process Management and have plenty of practical experience of it”8

“Improving process is vital for Figure 4. Just 20% of respondents stated that BPM is currently an important agenda item atour business but can be a painful managerial level.process which meets resistance Which of the following best describes the current level of interest in Business Processin some quarters, hence the Management within your organization?need for C-level sponsorship.”IT Manager, enterprise level Our We are investigating Currently Business organization is the concept and Process Managementutilities business, UK small projects have is an important agenda not currently interested in been started item at managerial“Process improvements need the topic level and at least one strategic initiative into be embedded throughout this field is under waythe organization. The top 10.5%management’s time and 18.6%attention needs to be given tosuch a strategic and longer- 20.1%term value creating item.”Business Unit Manager,Federal government agency, USA 16.6% 17.4% We are interested in the subject 16.8% but there have One or more been no concrete departments are actions so far currently dealing with it at a more tactical level Don’t know9

How may I help you?The key benefits of BPMThis research examines which business drivers are mostcritical in different sectors and explores the application ofBPM in these aspects.To understand the benefits ofa BPM implementation for a Cost-efficiencyparticular organization, it makessense to consider first which Many organizations grasp that medium-term. Of those companiesbusiness drivers are most critical improving cost-efficiency requires surveyed that are currently planningfor the organization. The business more than simply slashing budgets. to launch a process managementchallenges that respondents identified Strategic investment is required in initiative, the area in which the highestas most important reflect the order to achieve material savings. proportion believed the project couldmacroeconomic outlook prevailing 56% of respondents anticipated that have greatest positive impact wasin many developed markets and their organization would increase in maximizing cost-efficiency.the pace of technological change. investment in efficiency over the next 12 months. Far-sighted companies are recognizing that effective implementation of Business Process Management technology and techniques can be a route to achieving significant efficiency savings in the Figure 5. 56% of businesses will increase investment in maximizing cost-efficiency over the coming year. How will your investment in the following business area change over the next 12 months: Maximizing cost-efficiency? 37.2% 30.1% 43.0% 32.8% 35.4% 30.7% 23.4% 29.2% 21.9% Invest a lot more Invest a little more Invest the same 5.6% 5.0% 4.4% Total 1.1% 0.0% 0.0% US UK Invest a little less Invest much less10

56% of respondents anticipated The application of BPM technology resources, or increase output with thethat their organization would and thinking automates complex same resources. BPM can be an integralincrease investment in efficiency processes, reduces manual work and part of an intelligent cost managementover the next 12 months. eliminates duplication of effort. 74% strategy, which allows a business to of respondents who launched a BPM cut costs rather than cut growth. initiative with a view to reducing“With process improvement manual work reported a positiveyou’ll streamline and automate impact on the business. It is possiblebusiness processes, give to achieve the same output with fewereveryone in your company acomplete view of the customer,provide deeper analysis and Figure 6. The three areas in which businesses anticipate BPM could have the greatest impact are: Maximizing cost-efficiency, optimizing time-to-market, facilitatinginsight into critical sales customer self-service.and customer metrics, keepeveryone focused on getting In which of the following areas do you think process improvementnew customers while keeping could have the greatest positive impact on your business?the ones you already have.” Facilitating customer Maximizing self-service cost-efficiencyIT Consultant, enterprise levelprivate healthcare business, UK 29.7% Optimizing 55.8% time-to-market 38.8% n.b. Respondents were able to select more than one answer, so percentages sum to more than 100%. Figure 7. 74% of businesses that introduced BPM to reduce manual work and increase automation reported a positive impact. What impact has this BPM initiative had on your business from the following perspective: Improving process performance by reducing manual work and increasing automation? 43.1% 31.0% 15.5% 6.9% 1.7% 1.7% A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact nor a negative impact11

Business AgilityIn uncertain economic times, business agility is important. Astechnology cycles move ever more quickly, businesses are constantlystriving to cut cycle times: two thirds of respondents (66%) identifiedoptimizing time-to-market as an important business driver.5% of survey participants anticipated Figure 8. 78% of businesses believe their BPM investment improved the flexibility of thethat their organization would increase organization.investment in their ability to react What impact has this BPM initiative had on your business from the following perspective:to changing market conditions Improving the flexibility of the organization?over the new 12 months. Agileorganizations realize higher marginson their goods and services by taking 39.5%advantage of market opportunities: 38.6%two thirds of respondents (66%)identified optimizing time-to-marketas an important business driver.BPM enhances the ability ofbusinesses to react to changes in 12.5%the business environment. 78%of respondents who introduced 6.8%BPM with a view to increasing the 2.3% 0.0%flexibility of the organization reported A very negative Quite a negative Neither a Quite a positive A very positive Don’t knowa positive impact on the business. impact impact positive impact impact impact nor a negative impact12

“Taking the attitude that ‘it has Capgemini view Rules management always worked like this’ is no way to compete. We are a lean Any organization looking to Organizations manage their organization, constantly trying to achieve business agility must interactions with the external stay ahead of the competition.” embrace three key concepts that world through documented and we like to call “the agile agenda”: agreed policies and procedures: Customer Services Manager, medium- processes are just one example. sized manufacturing business, Sweden • Process management Business rules are explicit policies embedded within processes. • Rule management The ease with which these rules • Integration and automation can be adapted to comply with regulatory or market pressure can Process management often be a source of competitive advantage. Organizations that To be agile, organizations know the value of rules often use must also be in control of decision engines to find, update, their process assets. Processes deploy, and maintain rules must be documented and across processes in real time. understood. They must be visible and measured continuously – BPM is moving into an ideally in real time – to ensure unstructured, collaborative age. compliance with shifting market Rules management will be the and regulatory objectives. way to stay properly governed, visible, and compliant, while Business Process Management dynamically keeping processes on (BPM) solutions provide modeling track with changing and complex capabilities that make processes desired outcomes, goals and KPIs. explicit as models. These models are created by, or in collaboration It will become increasingly with, end users. More importantly, important to set rules properly they can be updated by users in order to manage BPM for without recourse to IT. increased agility. There will be a premium on managing Regardless of who makes changes, uncertainty, and on making better the agility comes from the fact that decisions about business rules. the changes are made to explicit Simulation and optimization models rather than changes to techniques can help, and so can lines and lines of arcane code. real-time analysis and response.13

ComplianceCompliance is at the forefront of the minds of businessdecision-makers. Large organizations face great pressure todemonstrate their adherence to rules in an ongoing fashion.More than 77% of respondents 70% of participants indicated thatwho introduced BPM with a view responding to changes to legislation implementation of BPM. Interestto improving compliance and risk is an important consideration for their in BPM is also growing rapidlymanagement reported that the business. If companies do not have in traditionally heavily regulatedinitiative had a positive impact an agile, flexible system for handling industries such as life sciences andon their business in this regard. compliance it can be a costly business. aerospace. Application of BPM can allow businesses a great advantage Within BPM systems, companies can in terms of accommodating new“In the past, there were stand- build compliance into their business legislation quickly and withalone systems followed in rules. Processes produce automated minimum disruption. BPM allowseach department and there reports, demonstrating adherence companies to isolate specific ruleswas no cohesive or effective to legislation in an immediate, cost- that may be subject to change andcoordination between these efficient way. More than 77% of treat them in a certain way, so thatsystems. For every purchase respondents who introduced BPM instead of having to rebuild anorder, for example, people from with a view to improving compliance application or process each timethree different departments used and risk management reported that legislation changes, it is possibleto be involved and there was a the initiative had a positive impact to retain the 80-90% of rules thatchance of violating commercial on their business in this regard. hardly change. For example, aor legal laws as compliance was BPM application can be adjustedonly taken into consideration Capgemini view to reflect new tax legislation atat the end of the process, the end of each tax year, withoutrather than at every stage.” Rafts of new legislation in sectors having to rewrite the entire system. such as banking and insurance areDeputy General Manager of Finance, providing the impetus for thelarge utilities business, India Figure 9. 77% of businesses that introduced BPM to improve compliance and risk management reported a positive impact. What impact has this BPM initiative had on your business from the following perspective: Improvement of compliance and risk management? 39.0% 38.1% 12.7% 6.8% 2.5% 0.8% A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact nor a negative impact14

Customer-centricityFor consumer-facing businesses, the advent of new technologyhas radically changed the way in which they engage withtheir customers. In the age of always-on, ubiquitous access,companies have to respond faster than ever before.43% of respondents 41% of respondents anticipated Companies are using Business Processanticipate that investment that their business would increase Management to support new waysin multi-channel access will investment in facilitating customer self- of interacting with customers. 78%increase over the next year. service over the next year. The figure of customers who introduced a BPM rises to 52% in banking, and 47% in the initiative with a view to improving telecommunications sector. Similarly interactions with clients reported 43% of respondents anticipate that that the impact on the business investment in multi-channel access was positive in this aspect. will increase over the next year, including 52% of respondents in the telecommunications sector. Figure 10. Half of banking and communications organizations anticipate increasing investment in facilitating customer self-service over the next 12 months. How will your investment in the following area change over the next 12 months: Facilitating customer self-service? Banking TME 1.8% 2.6% 8.2% 10.3% 38.2% 40.5% 33.6% 31.0% 18.2% 15.5% Invest much less Invest a little less Invest the same Invest a little more Invest much more15

“Self-service is generally Figure 11. 78% of organizations who introduced BPM to improve interactions with clientscheaper. The number of reported a positive impact. Improving the interactions with clients and / or CRM.people being employed in What impact has this BPM initiative had on your business from the following perspective:call centers can be reduced. Improving interactions with clients and/or CRM?Younger customers in particularexpect to be serviced through 41.8%emerging Web 2.0 channels.” 36.1%Systems Architect, enterpriselevel telecommunicationsbusiness, Australia“BPM combines business 10.7%processes, people and 5.7%technology to achieve one 4.1% 1.6%single goal: getting and keepingsatisfied customers. It’s an A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impactoverall strategy to help you learn nor a negativemore about your customers impactand their behavior so youcan develop stronger, lastingrelationships that will benefitboth you and the customers.” Capgemini view BPM solutions are increasingly seen as CRM 2.0. BPM allowsIT Consultant, enterprise level Customers are demanding more streamlined process forconsumer products and retail more: More personalization and managing customer interactionsbusiness, North America customization, a broader range regardless of channel, all the way of engagement channels, greater through the front, middle and access to information and more say back office stages to resolution. in the buying process. Customers also expect recognition and a Example: Warranty consistent response, regardless management of what channel they are using. Organizations are increasingly One application of BPM that using BPM to respond to these benefits both vendor and changes. BPM is transforming customer is in the field of case management and moving warranty management in the into the traditional CRM space. automotive sector. Typically, Adding a BPM layer to existing administering warranties is processes helps address the clumsy and expensive, involving problem of case management by manufacturers, dealers, suppliers ensuring that all information is and customers. Information is integrated – stakeholders have a spread across myriad systems 360 degree view of all interactions and claims may be governed by with each customer. Companies different policies and procedures. are able to access the right data Application of a BPM solution in the right place and at the right unifies all information, allowing time. The appropriate response the streamlining of the full to different scenarios can be warranty management process. automated. Wherever customer care is involved, there is scope for BPM to make life easier for both vendor and customer.16

Case Study – Business ProcessManagement and customer-centricityChallenge: A Dutch software business which sells book-keepingand HR software wanted to improve customer retention.The company redesigned its complaints procedure, Benefits of the approachadopting BPM software and thinking to improveinternal communication between departments This rigorous complaints procedure has delivered tangibleand external engagement with customers. business value. There is a higher level of customer retention. Complaints are far less likely to result in the cancellation ofWhat the process looked like before subscriptions. In fact, the rate of subscription cancellation is actually 7% lower for customers who complained andFor years the company had no central customer service had their problem addressed than for those who did notdepartment. Customers were directed in an ad hoc fashion complain in the first place. Finally, there is a greater cultureto either sales or product departments, depending on of cross-departmental collaboration within the organization.the nature of their complaint. The lack of process ledto departments shifting responsibility for complaints.Employees gave inconsistent answers to customersposing similar questions due to lack of documented “Everyone in the organization was trying toprocedure, causing confusion and further complaints. avoid taking any responsibility, saying ‘it’s not our department, it’s their department whoWhat it looks like now should be dealing with it.’ That was a major issue – no one wanted to say to the customer,The company created a team dedicated to customer ‘I’ll take responsibility, I’ll make sure this goesservice. Customers are presented with a telephone menu well, I’ll make sure that you’re happy’.”as soon as they dial in so that their complaint can becategorized. Customer services representatives note Complaints Managerdown the details of problems in a case file. Cases aredivided into ‘dissatisfactions’ and ‘complaints’ (whichare more serious). Notifications are then sent to agentsin departments such as technical support and sales with “We now invest the time to make customersthe relevant expertise who follow up on the issues. The happy: a fundamental part of this is working as amore serious ‘complaints’ are dealt with at managerial company, not just as departments who are out forlevel. All agents have access to the same case file and themselves and care only about their targets.”all interactions are logged ensuring seamless sharingof information. The success of the execution of the Complaints Managercomplaints procedure is measured quantitatively.Issues encounteredStaff were initially resistant to this new process, whichwas perceived as bureaucratic. The sales departmentfelt that handling complaints management hinderedthem in meeting targets. Different departments wereunused to working collaboratively to solve problems.17

Social media strategyOne area that was investigated in our BPM researchwas the level of emphasis that companies are placing onboth the threat and opportunity from social media.53% of respondents believe this “We need to introduce a systembusiness driver will become more technology has already had an to handle social media. At theimportant for their business over the impact on customer’s daily lives moment one team writes downnext 12 months. This figure rises and is here to stay. Through social mentions on post-its beforeto 60% in the United States, the listening and an effective Business handing them over to anothermarket which sets the pace in terms Process Management system, team to respond. You canof harnessing new forms of media organizations ability to listen to the guess how efficient this is.”to improve business processes. conversation and respond through changing business processes will Business Unit Manager, largeAnecdotal evidence from the research, become a major differentiator. insurance business, Spainillustrated by the quotations, It is essential to combine socialshows how some large businesses media data with unstructured “The power of social mediahave been caught off-guard by the and structured data from other is rapidly increasing, whichrevolutionary effect that social sources to provide a holistic means that it will become amedia has had, and in particular and representative picture of focal point for all mass marketthe way that B2C organizations what your customers are saying. businesses. Market trends willinteract with their customers. A social media strategy that is be dictated by social media supported by an organization that trends, and the public view of aThere has been some complacency is able to rapidly alter business company will be determined byin engaging with and investing in processes, listen to and identify its social media interaction.”social media. It is clear that businesses and manage risk early on, andmust develop a social media strategy. also provide sales opportunities Enterprise Architect, enterprise levelOrganizations can no longer dictate the will be an effective one. automotive business, Germanyterms of engagement with customers –it is now customers who are in controlof the conversation. In light of this Figure 12. 53% of businesses anticipate that social media strategy will become moreloss of control, organizations need to important over the next 12 months.listen to and respond effectively tocustomer-initiated activity. Customers Which of these drivers do you think are likely to become more or less important over the next 12 months: Managing the opportunities and threats of social media?now expect a greater level of attention,as well as a near-instantaneous Totalresponse. Businesses should also be USAaware of what a powerful asset thisrich real-time feedback can be. Capgemini view Organizations are traditionally used to being in control of customer interactions and have long built IT systems that push 2.3% 1.8% 5.9% 1.8% 39.2% 36.3% 31.6% 33.6% 21.1% 26.5% messages to the customer. It is Become much Become a little Stay the same Become a little Become much clear, however, that social media less important less important more important more important and the consumerization of19

Staff satisfactionLarge organizations are engaged in a continuous effort to createand sustain a rewarding working environment that mobilizes andmotivates their staff. An important benefit of improved processesthat emerged from this research is the impact on staff satisfaction.“The previous management 75% of those organizations withinunderestimated process our sample that launched a BPM but also in terms of improving jobdevelopment. Processes initiative with a view to improving satisfaction for the teams involved.weren’t documented. We staff satisfaction reported that the Alongside traditional ROI modelshad to repeat the same steps project had had a positive impact companies should consider theover and over again to reach in this regard. Strikingly, not one ease of use of resultant systems,a solution. Money and time respondent reported that the initiative the reduced cost of trainingwere wasted, staff weren’t had had a negative impact. and the improved retentionmotivated and customers were of valuable team members.frustrated. Now we’ve improved Capgemini viewour processes, all our staff are The quantitative researchconvinced of the benefits.” Enhanced staff satisfaction is an findings show that Business interesting ‘hidden benefit’ of Process Management initiativesDepartment Officer, enterprise process improvement. Enhanced can have a positive impactlevel insurance company, France staff experience is rarely built into on many different parts of an business cases for BPM investment. organization. The next section of However, removing laborious the research demonstrates how manual workflows, reducing the BPM ultimately delivers value in need for ad-hoc intervention and terms of Return on Investment. making it easier for staff to operate efficiently, can have clear benefits, not just in terms of productivity Figure 13. 75% of businesses who implemented BPM to improve staff satisfaction reported a positive impact on the business. What impact has this BPM initiative had on your business from the following perspective: Improving staff satisfaction? 40.8% 33.8% 19.7% 5.6% 0.0% 0.0% A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact nor a negative impact20

Show me the money:BPM and Return on InvestmentThe research demonstrates clearly that investment in BusinessProcess Management can yield tangible business value.Of those respondents who had tried to measure ROI fromBPM, a remarkable 96% reported a positive return, with 55%measuring a return of at least twice their initial investment.“We consolidated by centralizing In the past, businesses found it difficult Figure 14. Just 39% of respondents havethe IT infrastructure so that to quantify the Return on Investment attempted to measure ROI from BPM in a formal way.we didn’t have hundreds of from BPM programs as the benefitslittle silos everywhere. This were various and wide-ranging. Have you attempted to measurewasn’t a management power It can be a challenge to measure Return on Investment (ROI) from this BPM initiative in a formal way?trip, it was about saving a lot intangible but essential elements ofof money. Ultimately, from BPM, such as cultural change andan economic perspective, employee behavior. Indeed, our Yes No Don’t knowall the departments win.” research shows that businesses are still learning how to assess the valueSenior VP for IT, consumer of a BPM investment, with only 39% 38.7% 29.0%products and retail Business, UK of respondents stating that they have tried to measure ROI in a formal way. Capgemini view Setting the business case for organizations is often challenging. Getting the appropriate balance 32.3% between the different objectives across the organization is key and rarely an easy task. However once objectives are set, and measurements in place, we have seen BPM programs delivering significant ROI. In addition, it is important to measure quantitative and qualitative factors when implementing BPM, and to track those measures through to completion of the project. Those results in turn inspire further change.21

Figure 15. 96% of respondents calculated a positive ROI from investment in BPM. Examples of Return on Investment What level of ROI did you calculate for the BPM investment? Cost reduction and Negative Return on Investment 1.9% efficiency gains: No Return on BPM can help lower the cost Investment 1.9% of running, changing, and executing processes. Up to 1.5 times ROI 12.4% A North American Between 1.5 and 2 times ROI 24.8% insurance organization: Between 2 and 22.2% • Gained 40% cost reduction 3 times ROI over a five year period Between 3 and 12.0% 4 times ROI • Reduced training time from as long as two Between 4 and 9.0% 5 times ROI weeks to just one day Between 5 and 4.1% • Gained ability to execute the 10 times ROI First Notice of Loss (FNOL) process with greater efficiency Greater than 10 times ROI 2.2% and accuracy as a result of increased automation Don’t know 9.0% • Introduced real-time analytics of overall claims operations An automotive company: • Reduced FNOL Total Cost of Ownership by approximately • Improved their cycle $12 million over the four years time by 50% following implementation A worldwide engineering • Was able to offer its organization: customers a market-leading claims experience • Ran a global operation to optimize and harmonize the A public sector organization: leading business processes and support, leading • Used sophisticated case to precise supply chain management to achieve planning and processing a win-back time of 70 minutes per case • Achieved real-time, end- to-end transparency Increase in competitiveness and agility • Established a more accurate process, with accelerated BPM reduces time-to-market for supply chain performance and new products and services. improved competitiveness A global banking organization: • Reduced time-to-market for new product release from nine months to four months22

Speculating to accumulate:BPM as a counter-cyclical investmentThe high level of Return on Investment that BPM canpotentially deliver, discussed in the previous section ofthe report, perhaps explains why interest in BPM actuallyincreases in relatively challenging market conditions.“Growth via demand will be 68% of respondents who were seriously Figure 16. 68% of respondents consideringdifficult, so we have to improve considering investment in BPM state a BPM investment state that a more challenging economic climate overprofitability by enhancing that a more challenging economic the next 12 months would increase theour internal processes.” climate would increase the attention attention their organization paid to process paid to process improvement. In improvement to process improvement.Risk Manager, enterprise level theory this is a simple equation: at If the economic climate in your sectormanufacturing business, UK a time when it is difficult to acquire proved more challenging over the next 12 new business, process improvement months, what impact do you anticipate this would have on your organization’s offers a way to boost the bottom attitude to process improvement? line by making cost savings. We will pay a lot more attention However, challenging conditions can We will pay a little more attention create barriers to BPM adoption. If employees are concerned about job It will not impact on the attention paid security and their personal well-being, We will pay a little less attention BPM is more likely to be perceived as a We will pay a lot less attention threat rather than an opportunity. 44% Don’t know of respondents in the survey stated that resistance from staff responsible 6.4% for existing systems such as SAP and 2.5% 31.5% CRM within their organization was 5.6% a barrier to process improvement.2 17.9% Bottom line pressures can lead to a reductive focus on costs rather than an emphasis on the bigger picture. Money allocated to IT could be spent maintaining outdated systems that have no place in a modern technology environment. This is often a false economy. The BPM institute blog 36.1% uses an apt analogy to explain the likely consequence of trying to cut operational and process-related costs in the face of a downturn: “These organizations are just starving themselves, and it will likely come back to haunt them as the core infrastructure of the company – the corporate metabolism, is crippled to the point where it cannot function effectively.”323

“Even with the current economic 46% of survey respondents identifiedclimate, middle and senior a lack of change readiness ormanagement still find it difficult willingness at their organization asto embrace culture change, a barrier to improving processes.4move with the times and take Reactive companies that are notadvantage of the efficiencies ready to confront changing times willand cost savings that can not be able to introduce successfulbe delivered by BPM.” BPM. In order for a company to successfully deploy BPM, theProcess Manager, local company must be able to embracegovernment agency, UK change across the organization. In the following section of this report ways in which barriers“Companies in a defensive mode to BPM adoption can be brokensimply aim to survive. BPM will down are examined further.seem too daunting for them –rather than investing in new toolsand processes, they will cut IT Capgemini viewbudgets and try and muddlethrough with legacy tools in their BPM is not simply an out-of-existing format for a little longer.” the-box technological solution that can be introduced at will.Process Manager, enterprise BPM is a discipline that requireslevel telecommunications the adoption of a new culturalbusiness, North America mindset. In a downturn, BPM is attractive to companies that are offensively orientated, and looking to push their business to grow. In order to introduce effective BPM, an organization must be receptive to change, willing to break its mould and become something different. Executive sponsorship is key to driving this forward. One of the trends we have observed (though not suitable for all programs) is towards short term investments with fast ROI. BPM projects are often iterative – lasting 6-10 weeks per project, with each phase linked to a value based objective. In this context budget allocation is easier. 2 See Figure 21 3 http://www.bpminstitute.org/resources/white-papers/ bpm-ea-two-smart-investments-recession 4 See Figure 2224

Barriers to BPM implementationThe research highlighted various practical issues which preventorganizations from successfully implementing BPM.Five barriers in particular team all have their own targets and business domain. It requires willwere identified: priorities. It requires a different and impetus to transcend ways way of looking at processes to make of working that are constructed• Functional silo culture them end-to-end more effective. around existing bureaucratic structures. Vision and leadership• Fragmented budget from a senior level is essential Capgemini view for long-term BPM success.• Perception of BPM as an IT item BPM-driven ways of working BPM implementation renders the can then add value to a business• Resistance to BPM from IT greatest value when it is applied by linking functional silos and staff who have responsibility across organizations and across eradicating the inefficiency of for existing systems applications. However initiatives different business units working tend to deal with one subset of in competition with one another• A lack of change readiness processes because it is much easier on disconnected projects. or willingness to gain sponsorship for a process improvement initiative within aAll these internal barriers tocooperation must be addressedin order to achieve commonalityof purpose, which can directlycontribute to business value. Figure 17. 55% of businesses state that functional silo culture is a barrier to process improvement.Functional silo culture To what extent do you agree that these barriers to process improvement exist in your organization: Different parts of the organization tend to operate in functional silos?55% of respondents identifiedfunctional silo culture as a barrierto process improvement at their e greorganization, making it the most ly a eefrequently cited obstacle. Survey ong agr eerespondents who had experience of agr dis StrBPM initiatives explained how before htly norintroducing BPM, organizations were Slig re e ecompartmentalized into functional gre w r ag kno isaunits, with objectives and performance 6.6% lightly dee ithe n’t rmeasures broken down accordingly. sag Do NeThis method of working promotes 3.2% gly di S % % % %efficiency within a particular silo, on 23.0 24.7 10.3 32.1but undermines the possibilities for Strworking collaboratively and seamlesslyacross an organization. The attempt tointroduce cross-functional BPM canlead to internal politics. For example,when a retailer attempts to improvecross-channel access, addressingthe issue is immediately problematicbecause the online-channel owner,in-store channel owner, telephone-channel owner and customer service25

“In telecoms, the new buzzword Perception of BPM as an IT item Capgemini viewis an “integrated supply chain”,how to take everything from The survey findings indicate that BPM programs need to be drivenmanufacturing, procurement, there is little consensus across by a collaborative team of ITlogistics etc. and put that all organizations as to who should and business. Business shouldtogether under one ownership. take primary responsibility for drive the business case, theIn practice it never works like process improvement. In different process design and outcomes,that. At the moment we have organizations across the sample, this and IT needs to supply thean operations organization, was borne variously by IT, business infrastructure, core systemsa procurement organization, management, operations, or even and integration expertise. BPMa logistics organization dedicated process management brings the two – business and IT –and a delivery function all units. In many instances, budget together, to make those decisionsoperating in different silos. is fragmented across departments, jointly. It also creates a commonAll departments affected by a which can undermine the environment which serves toprocess should work together.” effectiveness of attempts to launch eliminate the communication coherent, cross-functional process barriers that traditional toolsHead of Logistics, enterprise management initiatives. and methods tend to amplify.level telecommunicationsbusiness, North America 48% of respondents identified the perception of BPM as an IT item as a barrier to effective process improvement. The figure is higher“Different departments in certain European markets suchwere taking decisions in as Italy, where it rises to 54%.their own way, with their own Perception of BPM as an IT item canphilosophies and objectives. hinder implementation as whileThis created a lot of tensions many of the costs and challengesand processes became stuck.” fall on the IT side, the principal benefits fall on the business side.Customer Services Manager, mediumsized software business, Netherlands Figure 18. Perception of BPM as an IT item is deemed a barrier to process improvement by almost half of respondents. To what extent do you agree that these barriers to process improvement exist in your organization: BPM is still seen too much as an IT item? e gre ee ee ly a agr agr ong htly dis Str Slig nor re e e gre r ag w isa kno re e ithe 10.8 htly d sag n’t Ne Do 4.4% gly di Slig % % % % 8.7% on 29.6 28.7 17.9 Str26

Figure 19. Allocation for process improvement is often split across organizations. Resistance from staff responsible for existing systemsWhich parts of the business hold the budget for process improvement? One potential hurdle to BPM implementation is that BPM gives power to the business side of an organization rather than the IT 19.5% department. 44% of respondents found 19.9% that resistance from staff responsible for existing systems was a barrier to successful process improvement. IT departments will naturally be IT Operations protective of current tools, and 27.1% argue that these can achieve value. Capgemini view 15.3% The introduction of BPM 19.5% Senior business technology will change the management applications landscape and there Individual will often be internal resistance to business units this. Ultimately, BPM technology 12.7% Finance will serve to create value for the organization as a whole and create 4.6% alignment between business HR manager and IT. However, it is important Dedicated process 21.0% management unit to engage the CIO and IT staff in BPM strategy to ensure that these stakeholders do not feeln.b. Respondents were able to select more than one they are relinquishing control. Inanswer, as budgets can be split across departments, forward-thinking organizationshence the overall percentage response sums to more Don’t knowthan 100%. where staff view change as an opportunity rather than a threat there is the best chance ofFigure 20. There is little consensus across organizations as to who should take primaryresponsibility for process improvement. successful BPM implementation.Which of the following take primary responsibility for process optimization? “The biggest challenge we had was actually the human aspect, not the systems and technical 13.1% aspect. We were suddenly 16.3% 3.1% saying ‘you’re not in charge HR manager of the network anymore, we Operations are.’ You’ve got to make sure 18.2% everyone’s ok about it before IT you can move forward.” 3.6% 15.6% Senior VP for IT, consumer Senior business Finance products and retail, UK management 12.8% 5.3% Don’t know 11.9% None of the above Individual business units Dedicated process management unit27

“There was opposition in Figure 21. 44% of respondents found that resistance from staff responsible for existingthe company from different systems was a barrier to successful process improvement.departments. People were To what extent do you agree that these barriers to process improvement exist in yourworried because their discretion organization: There is resistance from IT staff who have responsibility for existing systemsover their systems was being (SAP, CRM)?wiped out. There was alsoconcern that manpower wouldbe declared surplus as we put ee ee e agrsystems in place to do the work gre agr disthey had done previously.” ly a htly nor ong Slig re e StrDeputy General Manager of Finance, ee r aglarge utilities business, India agr w ithe kno dis e Ne n’t htly gre DoLack of change readiness isa Slig ly d/ willingness % % % % % ong 6.6% 10.5 12.4 15.9 27.0 27.7 Str46% of respondents identified a lack ofchange readiness or change willingnessat their organization as a barrier toBPM adoption. Organizations which Figure 22. 46% of respondents identified a lack of change readiness or change willingnesshave adequately functioning processes at their organization as a barrier to BPM adoption.can easily become complacent, and To what extent do you agree that these barriers to process improvement exist in yourfail to acknowledge the need for organization: There is a lack of change readiness and/or change willingness in thecontinuous improvement, leaving organization?them vulnerable to being overtakenby the competition. Companieswith an apparently well-functioning e gre eeapplication landscape can lack the ee agr ly a agrvision and appetite for a step change. dis ong htly nor Str Slig Capgemini view re e ee r ag w agr kno A BPM implementation may ithe dis re e n’t appear to offer radical change for Ne htly Do 6.4% y disag marginal return. Whereas when Slig implemented carefully, it can offer % % % l % ong % 25.2 29.5 16.5 10.7 organizations a step change in the 11.7 Str way they are able to do business. Large organizations that are processes, minimizing disruption accustomed to acting in a and ensuring continuity while particular way can also be wary facilitating process improvement. of overhauling and updating Business process and rules are processes because business rules captured and made explicit, and and business knowledge may be systems become self-documenting. embedded into long-standing Staff with the appropriate processes. In some instances authorizations can then maintain these rules may not be formally and amend processes and rules documented, so stakeholders are that are no longer hidden away concerned that when migrating in arcane coding languages. to new system, the full range of functionality may not be Capgemini recommendations captured. The great strength of for breaking down barriers and BPM is that it captures and builds successfully implementing BPM on existing ways of working, are summarized on the next page. renewing rather than usurping old28

Key conclusions and recommendationsBPM offers high value through process optimization – but first,organizations need to create the conditions for successAt a time when many market sectors are facing slow Define strategic objectives for BPMrevenue growth, customer churn, and increasedpressures on costs, BPM is a critical weapon in the battle BPM succeeds best when it is executed against clear businessfor efficient, effective processes that cost less. It allows objectives. Organizations embark on BPM programs fororganizations to become more customer-centric, and to different reasons, and so each business must identify andrespond in a more agile way to business challenges and prioritize its own strategic objectives up front. Involvingopportunities, however uncertain the business environment. senior management in this process is an important way toOther benefits include better regulatory compliance, ensure that they take ownership of the subsequent program.even where regulations are altering almost daily. Possible objectives can be grouped into three clusters:All this adds up to an exceptional ROI for successfulBPM programs – one that can often make it 1. Cost reduction, efficiency, and effectivenesspossible to buck gloomy economic trends. 2. Customer-centricity and agility, for exampleBefore an organization can realize BPM’s potential, in adapting to changing market conditionsthere are usually some challenges to overcome. Thesetypically include a silo-based organizational structure and 3. Compliance with rapidly-evolving regulationsculture, resistance to change on the part of stakeholders,and fragmented process improvement budgets. Objectives should relate to the business as a whole, and not just to individual functions. Setting the rightBelow, we make some recommendations for objectives, and then managing against them, helps thepositioning an organization to overcome the organization to work as a single entity, rather than in silos.challenges and realize BPM’s promise. Build a business case for BPMGet C-level sponsorship The business case for a given BPM initiative will varyStrong vision and leadership at the C-level are the key to depending on the organization’s objectives, as well as itsovercoming barriers between organizational silos to create an maturity with regard to BPM. Involving senior managersenvironment for BPM success. Without senior management in the process of building the business case, as opposedsponsorship, a BPM initiative is usually doomed before to simply presenting them with the end result, willit even starts. Securing C-level sponsorship can itself be help to gain C-level ownership of BPM initiatives.difficult, particularly if the people who really “get” BPM findit hard to communicate the potential in business terms. The The business case should balance the requirements ofprocess of jointly defining objectives and a business case, as different parts of the organization as far as possible. Onrecommended below, can improve communication and build the benefits side, it should take account of “soft” benefitsthe vital senior buy-in. such as improved staff satisfaction and retention, and reduced cost of training, as well as financial benefits. A crucial element of the business case should be a roadmap with delivery milestones, to show when benefits will be realized. Goals should be clear, measureable, and realistic. For those organizations starting out on BPM, our recommendation is to think big, start small, and scale rapidly. It is similarly important to measure post-implementationto establish when benefits are actually realized and recognize success.29

Establish governance Realize and communicate benefits Successful BPM requires governance at an operational It is critical to track and manage BPM progress againstlevel. The CIO needs to provide vision and direction, the business case, ensuring that objectives are being met,and be willing to do so if he or she has engaged in the milestones achieved, and benefits realized. Measurementprocess of objectives definition and business case needs to be qualitative (e.g. through customer andconstruction described above. Even so, a senior executive staff satisfaction surveys) as well as quantitative (e.g.is unlikely to be able to provide the constant day-today through measurement of cost reductions) – both types ofinvolvement and decision-making that is required. measurement will have been defined in the business case.Day-to-day decisions on projects and programs thereforeneed to be made by a well structured, cross-functional Demonstrating value early on in a project is the best way toteam of IT and business representatives, mediated by a support the case for continuing it. In addition, demonstratingsteering committee of senior sponsors and stakeholders. success on one project is likely to inspire others to follow suit.Integrate new and existing technology Give BPM organization-wide reachBPM depends on the correct alignment of technology Although success breeds success, organization-widesolutions with the business case. New BPM tools adoption of BPM is rare unless patches of success andand suites are likely to be implemented, but most fragmented budgets are brought together to createorganizations will also need to take into account a organization-wide awareness, enable a repeatablecomplex landscape of legacy back office applications. experience and reuse of components to build momentum and further reduce costs. One way toUsually there is no need for dramatic “rip and replace” do this is by setting up a center of excellence. Again,systems migrations. Instead, the emphasis will be on C-level sponsorship is essential to make it happen.leveraging the investment in existing solutions using BPM toaugment, and plug execution gaps in, legacy applications.. In summaryIn other words, the deployment of an agile BPM layer canmodernize, and extend the functionality of, legacy systems. To achieve the potential value of BPM, organizations must first create the conditions for success. That meansManage cultural change securing and using senior sponsorship, rigorously defining organization-wide strategic objectivesBPM is not an out-of-the-box technical solution. It requires and a business case, and putting in place the rightthe adoption of a new culture and mindset on the part governance structures and the right technology. Theof both business (who will operate the new processes) BPM process must be purposefully managed throughoutand IT (who are responsible for existing systems). to ensure that the intended benefits are realized andBoth of these groups will need to adopt a new model of communicated. Budgets and resources may need to becollaborative working. We strongly believe that BPM as a integrated and/or centralized to achieve wider reach.discipline needs to be jointly owned by business and IT. C-level commitment and strong change management skillsIt follows that stakeholders from both business and IT are essential to bring about the required cultural change,must be ready and willing to embrace change. Initially including the move to greater cross-functional collaboration.there is often resistance, but if C-level managers havetaken ownership of BPM it will be easier to gain the Under the right conditions, BPM can deliver exceptionalcommitment of other staff members. Even so, managing value that more than justifies the effort involved,cultural change is one of the most challenging aspects as the experience of early adopters confirms.of BPM implementation, particularly where internalpolitics get in the way of cross-functional collaboration.30

Capgemini sector and country focusBPM as a management discipline can offer organizations –both private and public sector – a way of underpinning theirprocesses in order to deliver high value to the business.In the second section of the report, The sectors profiled are: We also explore BPM trends andwe take an in-depth look at the practices from a regional perspectiveapplication of BPM in five specific • Financial services in the following geographies:market sectors that are of particularinterest. The level of BPM adoption, • Public sector • United Kingdomand drivers of interest in BPM thinking,vary across market verticals. • Manufacturing, automotive • United States and life sciences • Australia • Consumer products and retail • Germany • Telecommunications, media and entertainment • Italy • France • Spain • The Nordics • The Netherlands32

Financial servicesOur survey shows that the financial services sector leads theway in adoption of Business Process Management software andapproaches: 65% of financial services decision-makers thatparticipated in the survey stated that their organization had launcheda BPM initiative of some description, while 52% anticipated thatgreater emphasis would be placed on BPM over the next year. Figure 23. More than half of financial services respondents believe their organization will place greater emphasis on BPM over the next year. How do you anticipate that the current level of interest in BPM within your organization will change over the next year? A lot more emphasis will be placed on Business 18.8% Process Management over the next year A little more emphasis will be placed on Business 32.7% Process ManagementNicholas Kitson, Head of Business over the next yearProcess Management, Global The same amount of emphasisFinancial Services Unit, Capgemini will be placed on Business Process Management over the 27.3% next yearThe effects of the global financial A little less emphasis will be placed on Businesscrisis still loom over financial services Process Management 4.2%providers. Shortcomings in regulation over the next yearof the sector have been brought A lot less emphasis willinto sharp focus by the economic be placed on Business 3.6% Process Managementdownturn, which has also forced over the next yearfinancial players of all stripes toreassess their cost position and the Don’t know 13.3%ways in which they fight for marketshare. Players in banking, insuranceand capital markets have all been Solvency II. The problem facing 62% of decision-makers in theforced to scrutinize their processes these financial institutions is how financial services sector indicateand Business Process Management to gain and maintain compliance that responding to changes inthinking has become more relevant in a fluid regulatory environment, legislation will become a morethan ever to these institutions. while at the same time satisfying the important driver for their business demands of customers for swift and over the next 12 months.Financial services efficient service. 62% of decision-and compliance makers in the financial services sector that participated in the survey “FSA legislation has becomeThe past few years have witnessed anticipated that responding to tighter and this impactsvociferous demand for the creation changes in legislation would become the sales process and theof new legislation in financial a more important driver for their techniques in place.”services. By 2013, banks will need business over the next 12 months.to demonstrate their compliance Process Manager,to the new Basel III standards on large insurance business, UKcapital adequacy; similarly, by 2014,insurance companies will needto demonstrate compliance with33

“We talk to people around risk, BPM allows financial services to controlled approach to the creditcompliance, Solvency, Basel... fuse regulations with processes. process by facilitating continuity ofthey understand the issues Organizations can build compliance to work across different departmentsand they know they will need to these new regulations into a repeatable, and different channels. Furthermore,do something around it. They measurable framework. This eliminates BPM also allows the business tograsp that there’s a deadline the need to impose compliance monitor how efficiently and accuratelyby which they need to address controls manually in an ad-hoc fashion, these processes are carried out.these issues and if they don’t reducing error and minimizingthey will be punished.” time and resources that need to be Since the downturn, insurance dedicated to regulatory demands. companies have been under pressureCapgemini BPM specialist, Spain to reduce operational and acquisition BPM allows financial services firms costs to assure sustainable growth to respond to government demands and profits. Legacy IT infrastructure73% of financial services by demonstrating compliance at insurance companies is unable todecision-makers who took part automatically. BPM also allows handle the increasing complexityin the survey anticipated that continuous change and different in claims processing that is drivenmaximizing cost-efficiency layers of customization: this means by a combination of technologicalwould become a more that rules can be refined to meet innovation, a challenging externalimportant business priority different requirements in geography environment and regulatory change.over the next 12 months. or product. It also affords firms the Processes frequently require multiple scope and flexibility to meet elements hand-offs and duplication and of future compliance which have yet redundancy are rife. This explains“We want to replace things to be precisely defined, and to model why insurers are embracing BPMthat don’t work, maximizing these intelligently in advance to see technology, which unpicks the knotscost-efficiency by paying more what the implications may be. that form in historically evolvednow to save more later.” processes, enhancing process Financial services and efficiency and cost effectivenessBusiness Analyst, cost-efficiency and allowing measurement of thelarge insurance business, USA success of claims processes. In the aftermath of the economic downturn, financial institutions are“Harmonizing processes focusing on cost reduction. Businessacross different divisions and Process Management allows financialsubsidiaries will save costs.” services companies to automate labor-intensive manual tasks, savingCompliance Officer, times and resources and boostingenterprise level bank, Australia efficiency. 73% of financial services firms in the survey anticipated that maximizing cost-efficiency would become a more important priority over the next 12 months. In the retail banking sector, incorporating front-end activities like Loan Origination into BPM systems ensures superior integration with back office functions. When this type of process is carried out manually, there is inevitable duplication of work and inaccuracy. The disconnection between separate back office and point of sales systems causes unnecessary re-checking by staff at different parts of the process, while the ongoing battle to reconcile different pieces of paper leads to errors. BPM allows banks to build a standardized, quality34

Financial services and The Capgemini World Insurance From the perspective of customerscustomer-centricity Report 2011 states: “Insurers’ of a bank, running processes like reputations live or die by their ability mortgage and loan applications in aIn these leaner times, both banks to process claims efficiently and BPM tool speeds up the process andand insurance companies are effectively.”5 A bad claims experience eliminates the kind of mechanicalfighting to increase market share. drives clients to competitors, a errors which damage perception of aConsequently, they are working on dynamic that is especially costly for brand. It can also increase the scopetopics related to customer front end, insurers given that it costs seven times for cross-channel service provision,many of which can be driven by a as much to acquire a new customer for example the sending of textBPM solution. 79% of respondents as it does to serve an existing one. messages to confirm transactions.from financial services firms in BPM joins up different business units,the survey stated that increasing streamlining claims processes by 5 Capgemini World Insurance Report, 2011the number of channels through removing internal barriers and sharingwhich customers can interact with salient information across differentthe business is an important driver. parts of a business, largely automatingSimilarly, 78% of these respondents much of the claims process. From thestated that facilitating customer self customer perspective, this removal ofservice is an important driver. manual work and duplication leads to shorter claims-processing time, and a more accurate and transparent claims calculation – the end result is greater customer satisfaction and retention. Figure 24. Facilitating customer self-service and enhancing multi-channel access are key business drivers for financial services organizations. Please identify how important each of the following drivers are for your business: Increasing the number of channels through which customers can interact with the business; Facilitating customers self-service. 4.2% 1.2% Not very Not at all important important 15.8% Neither important nor 34.5% unimportant Very important Increasing no of channels for customer interaction 3.6% 44.2% 6.7% Not at all Quite important Not very important important 38.2% Very important 11.5% Neither important nor unimportant Facilitating customer self-service 40.0% Quite important35

Public sectorGovernments are facing considerable pressures in 2012.The economic downturn in many countries means thatpublic sector spending is constrained. Legislation isconstantly changing, and technological change meansthat citizens expect a greater say in decision-making. is frequently invoked. At the moment The systems that governments use, public sector agencies in many markets for example to process welfare claims, are facing unprecedented budgetary are under constant strain as time- pressures. More than one in three consuming manual intervention is public sector respondents anticipated needed to keep up with the moving that maximizing cost-efficiency would target of legislation. The adoption of a become much more important to their joined-up BPM approach eliminates organization over the next 12 months. the cracks that appear in hand-offs In countries which are facing seriously between people and departments thatNico Kaptein, Operations Director, reduced government spending, this lead to costly waste. BPM can also giveGlobal Public Security, Capgemini figure is much higher – in the UK, government agencies the ability to more than two in three public sector change rules dynamically to keep up decision-makers anticipated that with the latest directives, eliminatingGovernments must attempt to deliver maximizing cost-efficiency would mistakes and reducing work.more efficient and transparent citizen become much more important.services whilst driving down costs,but they are regularly hamstrung in Figure 25. Maximizing cost-efficiency will become more important to public sectorthis attempt by outdated technologies organizations over the next 12 months.and outmoded ways of working. Thiscontext explains the growing relevance Which of these drivers do you think are likely to become more or less important over the next 12 months: maximizing cost efficiency?of BPM paradigms to the public sector.Citizen-centricityMany governments are increasinglyfocusing on delivering an enhancedlevel of citizen-centric service.Citizens expect the kind of 24 hour, 30.7% 35.5%multi-channel service they are usedto receiving in the private sector. Inhealthcare, for example, good casemanagement practice can be appliedto treatment of patients, which canrequire the contribution of a spectrum Stay the sameof different people with specialized Much more importantroles. BPM can address the information 5.2%silos that exist within enormouslycomplicated organizations like tax A little less importantbodies allowing continuity of work 27.8%by different agents in the process. 2.8%The elimination of waste is a Much less importantperennially hot topic in the publicsector, and the idea of efficiency savings A little more important36

In many markets, such as the 29% of public sector decision-Netherlands, public-private makers anticipate increasingpartnerships are viewed by investment in social mediagovernments as a way of improving strategy.efficiency. There is an erosion of the gapbetween the public and private spheres.This trend will drive governments “Social media will have moreto move away from closed networks impact on the public sectortowards platforms which facilitate than people realize right now.interaction with partners: this will Delivering services must befurther fuel a move towards more efficient, so it is importantopen systems, which will in turn make to facilitate self-service.”BPM a logical choice of platform. IT Manager, central governmentSocial Media Strategy agency, NetherlandsGovernments in the English-speakingworld, and Northern Europe, arebeginning to explore how they canharness social media potential for thebenefit of their citizens. Understandingof how to engage with social mediais admittedly still in its infancy ingovernment, with only 29% of publicsector decision-makers anticipatingincreasing investment in socialmedia strategy. However, during ourresearch, interesting hypotheticalexamples of how governments mightuse the technology emerged, whichsuggested that this could well be agrowth area in the near future. Forexample, police forces might explorehow they can make constructive useof the wealth of unstructured datathat emerges from digital sources toaid crime prevention. A BPM platformcan allow the swift and seamlessintegration of relevant social mediadata into conventional processes.37

Manufacturing, automotiveand life sciencesThe survey findings show that decision-makers in the sectorCapgemini groups together as manufacturing, automotive and lifesciences are relatively more likely than the rest of the sample to haveknowledge and experience of Business Process Management. Process to Value” explains, at these Three key business priorities companies “years of globalization and emerge from the research for large expansion – some organic, but much manufacturing, automotive and of it through mergers and acquisitions life sciences organizations: – have resulted in complexity in the value chain, redundancy in • Harmonizing business processes systems and processes, and a lack of transparency and flexibility in • Maximizing cost-efficiency processes”. The pressure to move from aArd Jan Vethman, heterogeneous, non-integrated systems • Optimizing time-to-marketPrincipal Consultant, landscape to a unified environmentManufacturing, Automotive and is often acute and affects the whole 82.3% of respondents in theLife Sciences, Capgemini business, hence the importance of sample stressed the importance of strategic sponsorship at the top level. harmonizing business processes. This is no surprise, as organic growthOne survey participant in three in different parts of multinationalstated that they “know a lot aboutBusiness Process Management andhave plenty of practical experience of Figure 26. In the manufacturing, automotive and life sciences sector, one respondent init.” This demonstrates the relevance three has extensive knowledge of BPM.of the discipline to the manufacturingindustry, which is addressing the need How would you describe your level of knowledge of Business Process Management?to reduce costs, boost operational I do not have muchefficiency and optimize time-to-market knowledge or practical 15.9%in the wake of the economic downturn. experience of Business Process ManagementThe manufacturing, automotive and I have some knowledgelife sciences vertical is advanced in of Business Process 19.5% Management but nohaving process ownership that goes practical experience of itall the way to board-level. This isillustrated by the fact that respondents I have some knowledgein this sector, more than any other, of Business Process 28.3% Management and limitedare likely to stress that decisions practical experience of itregarding process improvementshould be taken at the C-level. 72% I know a lot about Businessof respondents in manufacturing, Process Management 31.9% and have plenty ofautomotive and life sciences indicate practical experience of itthat they believe BPM should be treatedas a C-level concern, compared with61% of the overall sample. As the Don’t know 4.4%Capgemini report “Business ProcessManagement in Manufacturing: From38

companies often leads to the Figure 27. 82% of manufacturing, automotive and life sciences respondents stressed thedevelopment of local processes for importance of harmonizing business processes.distribution, sales and marketing. BPM Please identify how important each of the following drivers are for your business:can provide extra value by allowing Harmonizing business processes.companies to strike a fine balancebetween necessary and beneficialcentralization of processes, and 46.9%flexibility for adaption to specific localor departmental circumstances. Therehas been a longstanding drive for 35.4%harmonization in the manufacturingspace, but BPM technology allows fordifferent layers of harmonization.Maximizing cost-efficiencyis similarly a key driver formanufacturing, automotive and life 14.2%sciences companies, with emphasison integrating supply chain andoutsourcing non-core functions.The flexibility that BPM provides 1.8% 1.8%for collaboration with partners isvery relevant to organizations in Not at all Not very Neither Quite important Very importantthese sectors with regard to both important important important nor unimportantdistribution and supply chain.BPM can help break down the silos “We need to streamline eventhat occur in the supply chain and further to create better productsensure that all functions are aligned in less time to stay in business.towards the same delivery goals. Without process improvement we won’t stay competitive inOptimizing cycle time is invariably this business environment.”a priority for organizations in thissector: this was especially top of Enterprise Architect, enterprise levelmind for automotive organizations automotive business, Germanysurveyed. It is no surprise that 57.5%of decision-makers in these sectorsanticipate increasing investmentin optimizing time-to-market over “We are struggling to survivethe next 12 months. It is easier to in a competitive marketput together a business case when segment. Global harmonizationthere has already been a focus on is important to create newsuch a quantifiable metric. BPM opportunities for our business.”also allows for greater transparencyaround processes, and rich, real-time Business Analyst, enterprise levelmeasurement of performance. manufacturing business, NetherlandsFurther discussion of BPMmaturity in manufacturing canbe found in this Capgeminireport, “Business ProcessManagement in Manufacturing:From Process to Value.”www.uk.capgemini.com/insights-and-resources/by-publication/business-process-management-in-manufacturing-from-process-to-value/39

Consumer products and retailUnderstanding of the relevance of BPM thinking and technologyis less mature in the retail arena than in other industries. Increasing the number of channels enhance the customer experience. through which customers can interact This is driving interest in combining with the business was deemed an BPM and CRM systems at top retailers important business driver for 73% for whom outstanding service is a of decision-makers in the consumer priority. This is also relevant to the products and retail space. A BPM increasing number of consumer framework can help facilitate this products companies which have by linking the information silos that “direct-to-consumer” channels. exist around different channels.Brian Girouard, Global Consumer BPM allows seamless sharing of data,Products and Retail, Capgemini so all information relating to one customer can be logged in a single, easily accessible location. This helpsThis is illustrated by our research avoid the inevitable frustrations thatwhich shows that fewer than one in occur when a customer is passedfive consumer products and retail from one operator to another due todecision-makers believe that BPM is inconsistent or incomplete sharingcurrently an important agenda item of information. Customer serviceat the managerial level. There is still a representatives can even be promptedsense that retail, in particular, is less with useful contextual informationof a science and more of an art, less about customers at appropriaterigorous and structured than other junctures during interactions toindustries. Some of the participantsin this survey stressed the importanceof personal interaction in retail and Figure 28. Increasing the number of channels through which customers can interact withrefuted the notion that it could be the business was deemed an important business driver for 73% of consumer products andreduced to mere process. However, retail respondents.conundrums that are top-of-mind Please identify how important each of the following drivers are for your business: Increasingfor retailers, like facilitating seamless the number of channels through which customers can interact with the business.all-channel access and harnessingthe transformative power of socialmedia, are all excellent candidatesfor applying a BPM framework. 36.5% 36.5% 20.0% 7.1% 0.0% Not at all Not very Neither Quite important Very important important important important nor unimportant40

Online media strategy is fast becoming Figure 29. 70% of consumer products and retail respondents view social media strategy asa top priority for retailers. 46% of an important business driver.survey participants in the consumer Please identify how important each of the following drivers are for your business: Managingproducts and retail vertical anticipated the opportunities and threats of social media.increasing investment in managingthe opportunities and threats of socialmedia – more than in any other sector. 47.1%This is not surprising given that 70%view this as an important driver forthe sector. Front end applicationsthat deliver a CRM-type serviceincreasingly have to incorporate socialmedia, and these are best integratedinto wider architecture via a BPM 21.2% 22.4%platform. In verticals where word-of-mouth has traditionally beenimportant, the echo chamber effectof the social media space demandsattention. BPM allows customers to 8.2%build processes to mitigate negativeword of mouth or to amplify positive 1.2%chatter. Feedback received throughthese channels can be categorized Not at all Not very Neither Quite important Very importantand appropriate responses executed. important important important nor unimportantThe success of this type of activity canbe monitored and managed. Many “Our business is moving intotraditional offline retailers are daunted multi-channel retailing thereforeby the alchemy of new types of media, the need for social mediabut interactions in this space can be exposure is greater than ever.”efficiently standardized and structuredusing BPM approaches and tools. Department Officer, enterprise level retailer, Australia “Customer self-service is important from a customer perspective as it makes life easier, and a company perspective, as it minimizes cost, driving profit.” Compliance Officer, large retailer, Italy41

Telecommunications, mediaand entertainmentThe telecommunications, media and entertainment (TME)sector has lagged behind other sectors such as banking andmanufacturing in adoption of BPM thinking and technology. Figure 30. Half of respondents in the communications sector anticipate increased interest in BPM at their organization over the next 12 months. How do you anticipate that the current level of interest in BPM within your organization will change over the next year? 16.4%Jean-Marc Steffann,Vice President, Global Telecom, Mediaand Entertainment, Capgemini 34.5% A lot more emphasisOur research shows that the sector may 0.9%catch up quickly as half of decision-makers anticipate increased interest A lot less emphasisin BPM from their organization in 23.3%the near future. The TME industry A little more emphasisis facing a number of challengesthat are fuelling interest in BPM. 3.4%The research findings show that more The same amount 21.6% of emphasis A little less emphasisthan two in three telecommunications,media and entertainment companiesanticipate that maximizing cost-efficiency will become increasinglyimportant. The market is highly Don’t knowsaturated and revenue is likely toremain flat. Resulting pressureon margins is forcing TME will come under further pressure,players to focus on operational as both businesses and consumersefficiency and cost reduction. look to cut back on expenses and the risk of non-payment increases.BPM allows TME companies toreduce costs by automating processes, This is reflected by the finding that 72%integrating front and back office of companies in the sector state that afunctions and connecting all the challenging economic climate over theinputs necessary to complete a task. If next 12 months will prompt greaterthere is a further market downturn in interest in process improvement.developed markets, TME companies42

Product convergence in the This will provide another “We are thinking closely abouttelecommunications, media and incentive for TME companies to what BPM can do for us rightentertainment spaces, enabled by migrate from cumbersome, closed now. The size and age of ourregulatory change, means that TME legacy systems towards an open organization means that therecompanies are increasingly trying to architecture that allows efficient are a multitude of separate siloedsell convergent triple play or quadruple integration with other parties. processes and systems whichplay products. Major players who have proved difficult to replaceoriginated in different spaces are without negatively impactingjostling to offer mobile, fixed line, customers. We currently haveBroadband, and Pay TV. This case parallel streams of systemsmanagement challenge is compounded and processes for legacyby increased customer demand to customers and new or migratedaccess accounts via multiple channels, customers which is difficult, notfrom store to Smartphone app – more to mention costly, to manage.”than half of decision-makers whoparticipated in the research anticipate Systems Architect, enterpriseinvesting more in facilitating multi- level telecommunicationschannel access for their customers. company, AustraliaThis necessitates radical changes tosystems architecture as companies Figure 31. 72% of companies in the communications sector state that a challengingattempt to reconcile several pre- economic climate over the next 12 months will prompt greater interest in processexisting processes for account improvement.creation and account management. If the economic climate in your sector proved more challenging over the next 12 months,BPM allows businesses to handle what impact do you anticipate this would have on your organization’s attitude to processthe complexity of required account improvement?management processes. Informationsilos that have traditionally existed We will pay a lot more attentionaround different products, or between We will pay a little more attentionchannels, can be broken down, and It will not impact on the attention paideach customer interaction treated 8.3%as part of a seamless dialogue. We will pay a little less attention 1.7% We will pay a lot less attention 1.7%Consumer behavior is constantly Don’t know 36.7%changing in this market as technologyevolves: TME companies consequentlyneed to bring products to market 16.7%as quickly as possible if they are tosecure their share of the benefits.66% of respondents at thesecompanies anticipated that reducingtime-to-market would become amore important priority for theirorganization in the next 12 months.This shows that companies urgentlyneed to invest in infrastructure tosupport shorter cycle times. The useof a BPM framework allows telecoms 35.0%players to maximize business agilityand respond swiftly to marketopportunities. The development ofthese new products also means thatTME companies are being forcedto join forces with an array of newpartners, from applications developersto financial services companies.43

Country analysis significant opportunity for process over the next year. Market conditions improvement. 1 in 5 of the survey which are tougher than anticipated participants stated that BPM is an will put pressure on margins, forcing important agenda item at managerial businesses to scrutinize their cost level which is consistent with the position further. Indeed, of those broader picture across the sample. businesses that are considering a BPM implementation, 89% state that more The research suggests that there may be challenging economic conditions some opportunities for BPM to flourish. will prompt them to pay greaterLee Beardmore, Head of Business The UK is a world leader in financial attention to process improvement.Process Management, Capgemini, UK services, which comprises roughly 10% of the country’s economy. The sector, whose revenue growth has been 44% of the survey respondents driven in part by a generation’s worth anticipate that the level of interestUnited Kingdom of deregulation, now faces the prospect in BPM within the organization of both increased oversight, and cost- will increase within the next year.Fundamental changes are taking place cutting as a response to tougher marketin the UK economy as the country conditions. Consequently, much of the 67% of survey respondents instruggles to recover from the economic BPM adoption in the UK has occurred the public sector believe thatdownturn and avoid further recession. in the financial services sector. maximizing cost-efficiency willThe British media talks loudly about become much more importantan “Age of Austerity”. The private Agencies in the public sector in the over the next 12 months.sector is contending with a great deal UK, which is witnessing the greatestof market uncertainty, while jobs retrenchment in government spendingare being cut from the public sector, since the 1940s, are becomingand the influential financial sector increasingly aware of and receptive tois contending with new regulatory the benefits that a BPM approach canpressure. Driving growth, responding confer. Two-thirds of public sectorto market contraction and gaining survey respondents indicated thatnew efficiencies from the workforce maximizing cost-efficiency wouldall demand new ways of working. continue to grow in importanceThe research indicates that BPM will over the next 12 months, which ishave a role to play in addressing such driving interest in BPM investments.challenges. Indeed, 44% of survey The incumbent government isrespondents anticipated that interest also particularly interested inin BPM within their organization public and private organizationswould increase within the next year, partnering to deliver state services.while 1 in 3 anticipates that their This impetus towards collaborationorganization will launch a major drives interest in moving away fromBPM initiative in the same period. closed legacy systems towards the more open kind of environmentThe research indicates that knowledge that can be facilitated by BPM.of Business Process Management inthe UK is not as developed as in more There is still plenty of conjecture asmature markets such as the USA. to how the UK economy will fare inOnly 16% of the UK decision-makers the medium term; macroeconomicwho participated in the research events in the Eurozone and the widerhad plenty of practical experience global economy will impact on theof the topic, compared with 28% prospects for recovery. Consequently,in Germany and 32% in the USA. more than three in four UK businessesInterestingly only 9% stated that believe that ability to react to changestheir processes are ‘Optimizing’ in market conditions will be anwhich indicates that the UK still has important driver of business success45

that participated in the survey state that technology from consumer facing their processes are optimizing. This organizations, as the line between rises to 1 in 3 (32%) of US companies BPM and CRM becomes blurred. with more than 10,000 employees. As with other trends in BPM, US organizations will lead the way. US companies are relatively more likely to invest in BPM implementation in both good times and bad. When the 50% of US survey participants economy is buoyant, new paradigms indicated that interest in BPM drive interest in upgrading systems within their organization wouldVenkat Bharadwaj, Head of at forward thinking companies increase over the next year.Business Process Management,Capgemini, North America who want to extend competitive advantage. A good example is the 66% of US survey respondents emergence of social media. 60% of US indicated that harnessing theUnited States businesses anticipate that harnessing opportunities and managing the the opportunities and managing the threats of social media wouldThe economic crisis of recent years, threats of social media will become be an important business drivertriggered by crisis in the capital a more important business driver for for them over the next year.markets, had a widespread impact them over the next year – a greateracross market sectors and regions proportion than in any other market.in the United States. However, Social media strategy can be effectivelythe most recent economic and standardised and structured using BPMfinancial indicators show that approaches and tools. Alternatively,recovery is underway. US business BPM affords companies the businesscontinues to evolve and innovate, agility to react to difficult economicand the world’s biggest economy times. The recent downturn has causedremains the world leader in many many large organizations to refocus onimportant market verticals. ‘Lean’ principles – the legacy of this is that 65% of US companies anticipateThe US is indisputably the world’s increasing investment in maximizingbiggest market for BPM. Analysts cost-efficiency in the coming year.estimated that until 2010 NorthAmerica accounted for more than half The US economy is very diverse, andof the global BPM market by revenue. there are several sectors in whichThe top 3 BPM software vendors, Pega, BPM adoption is prevalent. As inIBM and Oracle, are headquartered many other countries, financialin the United States. The research services has led the way in termsfindings support the idea that the BPM of BPM adoption. US insurers havemarket is relatively mature. They also harnessed the power of BPM platformsdemonstrate that in many areas interest to simplify claims processing andin BPM approaches will continue to enhance case management. In thedevelop. 1 in 2 USA survey participants aerospace and automotive sectors,indicated that interest in BPM within open BPM systems allows massive UStheir organization would increase companies to collaborate effectivelyover the next year, while 43% stated with their legions of suppliers. High-that their organization intended to tech companies working in heavilylaunch a BPM initiative in that period. regulated areas such as life sciences are attracted to BPM as it allowsProcess knowledge and process them to demonstrate easily theirmaturity are rather more developed compliance to new regulations.within large US organizations thanelsewhere. An illustration of this is the In the next few years, there is likely tofact that a quarter of US organizations be a broader trend of interest in BPM46

country. However, relatively tight Australian government, on the other regulation allowed Australia to survive hand is keen to put the dividend the worst ravages of the financial crisis, it has reaped from commodities and Australian lawmakers believe that exports to good use, and has money their approach to risk management to invest in improving systems. is the best way to safeguard banks and other industries. Compliance is consequently a major consideration 53% of Australian companies for Australian companies. 51% of believe their organization Australian companies believe that will pay more attention toScott Foster, Head of Business Process responding to regulatory changes will BPM over the next year.Management, Capgemini, Australia be very important for their business over the next 12 months. 47% of 51% of Australian companies respondents at Australian companies believe that responding toAustralia anticipated that their organization regulatory changes will be very would increase investment in important for their businessAustralia has a dynamic economy, compliance over the next 12 months. over the next 12 months.which did not succumb to the This trend will be a key driver ofglobal crisis of 2008. The country is interest in BPM. BPM allows customerscurrently benefiting from a resources to remain compliant to regulationboom, with mines working flat out and, crucially, to demonstrate thisto meet Asian demand for a variety compliance automatically in a way thatof commodities. The Australian does not significantly impact on costs.government will soon be running abudget surplus, and will be considering Australian manufacturing isthe areas in which to invest to ensure struggling, due to the high valuethat the country remains in good of the dollar, while the cash-richeconomic shape in the longer term. commodities sector has its own priorities and ways of working. InterestThe level of process maturity at in BPM paradigms in Australia isAustralian organizations is not as therefore led by the financial servicesadvanced as at their US counterparts. sector and government agencies.17% of Australian companies state that Australia is a regional financial servicestheir process management includes hub and the sector is very mature.deliberate process optimization. Despite the robust national economy,Large Australian companies have Australian banks view economic eventstraditionally relied on outsourcing elsewhere in the world with trepidationbusiness processes to Asia. However, due to the hyper-globalized nature ofas the cost of BPO rises rapidly year finance. Significant recent job cuts atby year, Australian companies need Australian banks demonstrate thatto step back and consider a different companies are paying attention to theirapproach to managing their processes. cost position and bank executives areThis appears to be driving interest increasingly attracted to the potentialin Business Process Management. benefits of process efficiency.More than half the respondentsin the sample anticipate that their Banks want to drive out costs byorganization will pay more attention standardizing back office functionsto BPM over the next 12 months, and which have lots of duplication,24% state that a lot more emphasis benefiting from reuse wherewill be placed on the approach. possible. 46% of respondents from Australian banks anticipate thatEconomic commentators have posited their organization will launch athat Australia is a heavily regulated BPM initiative in the next year. The47

services sector is quite advanced. Both to concerns as to how the software banking and insurance businesses will fit into existing architecture. are prioritizing their ability to Companies with well-functioning remain compliant, and investing infrastructure are not necessarily ready in aspects of customer experience. for the step change that BPM implies. Both compliance and CRM can be enhanced by addressing them via a BPM solution. A third (36%) of 38% of German companies German participants in the research state that their processes are expect that the level of interest in BPM either ‘Managed’ or ‘Optimizing’.Matthias Jungkeit, Business at their organization will increase This rises to 79% amongProcess Management Consultant, over the next 12 months. While this German companies for whomCapgemini, Germany represents a significant increase in BPM is an important agenda interest, this figure is slightly lower item at managerial level.Germany than elsewhere, for example the English-speaking markets. This can 36% of German participantsIn recent years the German economy perhaps be explained by the balance in the research expect thathas consistently outperformed the and health of the German economy. the level of interest in BPM atrest of the Eurozone. Recent events their organization will increaseelsewhere in Europe have led to a The German exporting industries, the in the next 12 months.relative slowdown in the past few envy of much of the developed world,months, but Germany remains are in a strong enough position towithout doubt one of the leading prioritize investing in driving revenuenations in industrialized production. over reviewing their internal processes.The continued success of German Interest in BPM from the state sectorcompanies depends on their ability to in Germany is also relatively low at theintroduce technological innovations moment, due in part to challengingat competitive cost levels. public sector procurement processes.German industries have achieved In Germany, 45% of respondents statedsuccess in part through harnessing the that they believed that BPM shouldlatest methods of working, and German be treated as a C-level concern. Thiscompanies are under constant pressure is a lower figure than in, say, the US,to streamline services. However, just (65%) or Australia (69%). This may be38% of German companies state that because BPM is still viewed too muchtheir processes are either ‘Managed’ or as an IT item in Germany: only 11%‘Optimizing’, the two most developed of German organizations stated thatlevels of the capability maturity senior business management takesmodel. The fact that this figure rises responsibility for improving processes.to 79% among German companies for Similarly, only 10% of respondentswhom BPM is an important agenda indicated that they understanditem at managerial level demonstrates BPM to be a “holistic managementthe inextricable link between BPM approach”. This is a lower proportionapproaches and process maturity. than elsewhere and may ultimately undermine attempts to introduceMore than a quarter (28%) of BPM, as while the major benefits ofGerman participants in this survey BPM are delivered on the businessindicated that they had both extensive side, the barriers are on the IT side.knowledge and practical experienceof BPM techniques, which shows that Anecdotal evidence suggests that inBPM thinking is being adopted in Germany IT decision-makers canparts of the market. As in many other resist attempts to introduce BPM, duemarkets, interest from the financial48

efficiency over the next year. Given responsibility for process optimization. the uncertain market conditions in If applied correctly BPM could deliver Italy, and likelihood of significant benefits by breaking down the barrier changes to the rigid regulatory that exists in a lot of Italian companies environment, large organizations between business and IT, creating in the country know that they need a more coherent flow across large to increase their business agility. organizations and driving efficiency. Nearly half (47%) of the Italian survey respondents anticipated increasing investment in reacting to changes in 47% of Italian companiesAlessandro Czimeg, Head of Business market conditions, while a similar believe that the level of interestProcess Management, Capgemini, Italy figure (46%) envisaged increasing in BPM in their organization will investment in responding to legislative increase over the next year. changes. BPM allows companies toItaly adapt rapidly and cost effectively to changes in the business environment. More than half of ItalianItaly has faced well documented respondents indicated thateconomic challenge in recent times. During the research for this report, the perception of BPM asThe country has been in financial there was anecdotal evidence of an IT item was a barriertrouble since 2008. These ongoing burgeoning interest in BPM in a to process improvementissues are a consequence of, among variety of market verticals in different within their organization.other factors, a lack of productivity parts of the country. In Northernand competitiveness in the Italian Italy, manufacturing companies are Only 14% indicated thatwork place and a rigid regulatory interested in potential applications Senior Business Managementenvironment. Italy still has some of BPM with regard to automating takes primary responsibilityworld-class companies, and the and accelerating processes, and for for process optimizationfoundations of a strong export sector, increasing transparency of processes at their organization.but the country is increasingly trying and monitoring KPIs. In Milan, thereto reform its working practices in order is growing interest among financialto achieve an economic resurgence. services companies around compliance and improving interactions with19% of Italian survey respondents customers. Telecommunicationsindicated that the processes at their companies, often based in Rome, areorganization are ‘Optimized’. The also increasingly interested in thefigure rises to 23% at organizations benefits that can be delivered via BPM.with more than 10,000 employees. In contrast, interest in BPM in theThese figures are slightly higher than public sector is relatively undeveloped,international averages that emerged due to budgetary constraints.from this research, but they stillindicate that there is scope to drive One factor undermining the effectivevalue and efficiency through process adoption of BPM thinking in Italyimprovement. Almost half (47%) is the widespread perception ofof Italian companies believe that BPM as an IT item. More than halfthe level of interest in BPM at their of Italian respondents agreed thatorganization will increase over the the perception of Business Processnext year, which suggests that even in Management as an IT item was aa tough economic climate, far-sighted barrier to process improvementlarge organizations are willing to within their organization. Only 12%invest in innovations which will save of Italian decision-makers view BPMthem money in the long term. Indeed, as a holistic management approach59% of Italian survey respondents and in only 14% of organizations doesindicated that they would be increasing Business Management take primaryinvestment in maximizing cost-49

Interest in BPM in France is growing: Major manufacturing companies, for 39% of organizations in the survey example in the world of aerospace, rely anticipated that the amount of interest on numerous collaborative workflows paid to Business Process Management in order to achieve the design of at their organization would increase high-tech products. Application within the next year. But the discipline of BPM software and thinking can is yet to gain widespread support and ensure that their workflows are sponsorship at managerial level within seamlessly joined up and that work French organizations, which hinders is automated and performanceAlain Robbe, Executive Director, effective adoption. 11% of respondents measured wherever possible.Capgemini, France say that Business Process Management is currently an important agenda item at managerial level. This contrasts with Just 11% of French respondents the fact that two third of respondents state that Business ProcessFrance believe it should be treated as a C-level Management is currently concern. Many of the BPM projects an important agenda itemDuring the early stages of the recent that French participants referred to at managerial level.economic downturn, the French had taken place within a businesseconomy proved more resilient than area rather than cross-organization or 54% of French respondentsmany others, thanks in part to the cross-application. This stems from the stated that functionalprotection of European and French limitations of functional silo culture, silo culture is a barrier toregulations. However, as the crisis which makes it difficult to carry out BPM implementation atin the Eurozone has rumbled on, the far-reaching transformation projects. their organization.French economy has looked more More than half (54%) of Frenchvulnerable. France has lost its top participants agreed that functionalcredit rating, and French firms are silo culture is a barrier to BPMfacing a credit squeeze. The gap in implementation at their organization.industrial competitiveness between Recognition of this situation mayFrance and Germany is growing wider. generate important opportunitiesThere is pressure in the country for to help companies migrate to aan overhaul of corporate practices at process-centric organization.large organizations and receptivenessto new ways of running a company. The telecommunications sector is one area in which there has beenThe level of process maturity at some interest in BPM in the FrenchFrench companies is relatively lower market. When it comes to fulfilmentthan elsewhere. Just 9% of French of complicated multi-channelparticipants in the survey indicated propositions BPM allows handlingthat their processes are optimizing. superior delivery of service andStrikingly 19% of French companies enhanced Customer Relationshipwith 10,000 or more employees stated Management. There is also a growingthat their processes are ‘Chaotic’ interest in the benefits of BPM in(the least advanced category on the the public sector in France. BPMCapability Maturity Model), while can potentially facilitate efficiencyjust 7% of these companies stated that case management, through thetheir processes are ‘Optimizing’ (the digitalization of records, for examplemost advanced category). Nevertheless, with regard to private healthcare.French decision-makers are aware A further business trend which isof the importance of having clear driving interest in BPM in France is thebusiness processes, and there is increasing trend towards businessesan opportunity to help them in the collaborating with other firms inconception, implementation and order to become more competitive.automation of their processes.50

A further barrier to BPM 50% of Spanish survey implementation is the rejection of BPM respondents indicated that by IT departments. There is a sense staff who have responsibility that in Spain, business people grasp the for existing assets such as SAP value of BPM, but IT decision-makers or CRM systems are resistant are deterred by the pain involved in to process improvement. transforming current systems and training staff. IT are understandably protective of existing systems: one One in three Spanish decision- in two participants stated that staff makers anticipates that theJorge Villaverde, Financial Services who have responsibility for existing level of interest paid to BPM bySector, Capgemini, Spain assets such as SAP or CRM systems are their organization will increase resistant to process improvement. This over the next 12 months. illustrates how companies can reactSpain defensively when faced with the threat 35% of Spanish businesses are of a difficult business environment. anticipating investing more inHaving enjoyed an extended boom cost-efficiency over the next year.period in the decade up until the There is some interest in BPMglobal financial crisis, the Spanish adoption in Spain among companieseconomy has suffered recently as that are weathering the downturna result of economic turbulence in more effectively. One in three (36%)the Eurozone. The country is in decision-makers anticipates thatrecession and the government recently the level of interest paid to BPM byannounced the most austere budget in their organization will increase overthe country’s history in an attempt to the next 12 months. 35% of Spanishbring down the level of public sector businesses are anticipating investingdebt. Private sector firms in Spain face more in driving costs out of thea challenging business environment. business in the next year: BPM can allow organizations to drive cost outOnly 14% of businesses in Spain state of the business in the medium term.that their processes management Companies that make a strategicincludes deliberate process investment in new infrastructure nowmanagement and improvement. will be well placed to take advantageKnowledge of BPM in Spain is also of the upturn when it comes around.in its infancy. Only 12% of surveyparticipants state that they both The greatest interest in Businessknow a lot about the subject and Process Management in Spain comeshave plenty of practical experience from financial services companies.of it. A fundamental barrier to Banks are interested in ways in whichBPM investment in Spain is that BPM can help eliminate cumbersomeorganizations are putting investment manual back office processes, foraround new technologies and IT example requests to increase creditapproaches on hold, as they cannot limits. Insurance companies areaccess capital. Companies must similarly interested in enhancingcut costs and make do with dated customer experience, for example byinfrastructure. Almost half the facilitating multi-channel access.sample, (47%), state that they donot have the budget to optimizetheir processes. In the public sector,certain BPM implementations thathad been considered have been putaside because of cash constraints.51

BPM initiative over the next year. 35% of respondents in the Nordics indicated that they Interest in BPM thinking in the are anticipating an increased Nordics is being driven by the financial level of interest in BPM at their services sector and the public sector. organization over the next year. In countries such as Norway and Sweden, as opposed to Spain and Italy the government has money to invest 38% of decision-makers in expansive infrastructure projects. anticipate that they will launch a There are lots of initiatives afoot at BPM initiative over the next year.Jonas Schlyter, Head ofBusiness Process Management, a local government level in SwedenCapgemini, Nordic Region for improving citizen-centricity and 62% of Nordic decision- delivering citizens the kind of 24-hour, makers state that BPM should multi-channel access to services that be a C-Level concern.Nordic Region they receive in the service sector. These can be delivered by BPM solutions.The Nordic countries have fared better BPM also allows municipalitiesthan their European neighbours during to streamline service provision,the economic crisis. Norway has used eliminating manual work and the “From the point of view of aits oil fund to stimulate various sectors, duplication of effort. In the financial local government agency,while Sweden’s state finances provided services sector, business priorities eGovernment solutions aresolid protection. Banks in the region such as cost-cutting and adhering an important tool for drivingare well capitalized and public sector to regulatory change in an efficient both citizen satisfactiondebt is low by European standards. fashion are driving interest in BPM. and cost reduction.”13% of Nordic participants in the Many Nordic decision-makers CIO, Municipality, Swedensurvey stated that process management that participated in the surveyat their organization includes acknowledged that C-level engagement “The COO and CIO need todeliberate process improvement, is central to the success of a BPM manage ways of working, andalthough the figure rises to 19% implementation. 62% stated that to identify what performanceamong enterprise level organizations. BPM should be a C-level concern information is needed, whichA quarter of Nordic decision-makers compared to just 8% who do not is why they should involve(24%) state that BPM is an important think it should be. This suggests themselves in BPM.”agenda item at managerial level within that Nordic organizations may havetheir organization, which is a greater the senior level impetus required to Information Manager,proportion than in the UK (20%) but implement BPM over the coming years. Financial Servicesslightly less than in the USA (29%).However, just 9% of participants state One potential barrier to processthat they know a lot about BPM and improvement in the Nordics is thehave plenty of practical experience of gap between business and IT. Itthe approach, which is considerably can potentially be difficult to getless than in markets such as Germany Business and IT on the same page.(28%) and the USA (32%). IT departments are more likely to be sceptical about the value of BPM.While the Nordic countries are not 48% of Nordic decision-makersearly adopters of Business Process agree that resistance from IT staffManagement paradigms, they who have responsibility for existingmay well be quick learners. 35% systems such as SAP and CRM can beof businesses are anticipating an a barrier to process improvement.increased level of interest in BPMat their organization over the nextyear, while 38% of decision-makersanticipate that they will launch a52

mature markets like Spain (12%). identify facilitating customer self- This shows that BPM paradigms have service as an important business driver, begun to gain traction in many sectors. while 57% believe that it is important There are, however, some barriers to to increase the number of channels BPM adoption, which stem from the through which customers can interact tradition of investment in process with the business. A BPM framework at Dutch companies. Many of the can help by addressing the information investments have been in functional silos around the different channels. applications for just one part of theRoger de Ruiter, Head of process, and not having an end-to- end focus. This is exemplified by the 52% of Dutch participants whoBusiness Process Management, research which shows that 46% of are considering launching aCapgemini, The Netherlands the Dutch decision-makers surveyed process improvement initiative identify function silo culture as a believe it could have greatestNetherlands barrier to process improvement. impact in terms of harmonizing We have seen that many Dutch business processes.The Netherlands is recognized as businesses have invested heavily inbeing a mature market in terms of their existing systems. This can often One in six Dutch surveyBPM adoption. Dutch businesses lead to decision-makers requiring respondents states that theyhave traditionally been leaders in convincing of how BPM can extend have extensive knowledge andembracing innovative technology their existing investment leading to practical experience of BPM.and have therefore implemented increased flexibility and agility.generations of applications throughoutthe 1990s and 2000s. There is a long- As in other markets, the Dutch Roger de Ruiter, Capgeminiestablished tradition of harnessing financial sector is taking the lead in BPM Head in the Netherlandstechnology to support processes. This terms of adoption of BPM thinking summarized the benefits oftradition presents both interesting and software. Interest in BPM in the using BPM to cut through theopportunities and barriers regarding public sector is also growing rapidly in clutter of existing applicationthe adoption of BPM paradigms. the Netherlands. There is interesting landscapes in the following way: scope for application of BPM paradigmsLarge Dutch organizations have in fields as diverse as police, public “With BPM there is no longertypically extended their applications healthcare provision and customs. a difference between IT &in a piecemeal fashion over time as Capgemini BPM experts have observed Business; it’s your Business, andtechnology has evolved, extending and how pressure on budgets in the your customers will notice it.”building on core applications which Public sector has driven an interest inultimately means that companies will efficiency and reorganization of work.have complex application landscapes. Challenging market conditions in theIn the Netherlands, more than half Netherlands are driving further interestthe people who are considering in BPM. 70% of survey participantsintroducing a BPM initiative state stated that a business environment inthat the principal benefit will be to their sector that was more challengingharmonize business processes. A than expected would prompt them toBPM layer allows organizations to increase the amount of considerationachieve centralization of common they give to process improvement.processes while allowing a levelof flexibility where desirable. Capgemini experts observe that the convergence of BPM, ECM andOne in six Dutch survey respondents CRM technology is more advancedstates that they have extensive in the Netherlands than elsewhere.knowledge and practical experience Customer-facing organizations areof BPM. This is a similar figure to the increasingly redesigning their frontUK (16%) and rather more than less office and CRM functions, in a BPM tool. 60% of Dutch organizations53

AcknowledgementsWe would like to acknowledge theteam of collaborators who wereinstrumental in creating this report:Initial thanks go to the Netherlandsteam led by Roeland Loggen, whocreated the Netherlands survey in 2010,and whose thinking we leveraged.For project management, analysisand report content: James Copeand James Bakewell at FreshMinds,and the team at Capgemini:Nicholas Kitson, Tim Arkin;Sector leads: Brian Girouard, Ard-Jan Vethman, Nico Kaptein, Jean-Marc Steffann, Nicholas Kitson.Country leads: Jonas Schlyter,Matthias Jungkeit, Scott Foster,Roger de Ruiter, Venkat Bharawaj,Lee Beardmore, Alessandro Czimeg,Jorge Villaverde, Alain Robbe.For marketing and communications:Nikki Gordon Jones, Hester Decouz.For executive sponsorship: Bob ScottWe would like to thank all the paneland interview participants for theirtime and willingness to share openlytheir challenges around BPM© 2012 Capgemini. All Rights Reserved. Rightshore® is a trademark belonging to Capgemini. No part of this documentmay be modified, deleted or expanded by any process or means without prior written permission from Capgemini.54

About CapgeminiWith around 120,000 people in 40 countries, Capgemini is one of the world’s foremost providersof consulting, technology and outsourcing services. The Group reported 2011 global revenues ofEUR 9.7 billion.Together with its clients, Capgemini creates and delivers business and technology solutions thatfit their needs and drive the results they want. A deeply multicultural organization, Capgemini hasdeveloped its own way of working, the Collaborative Business Experience™, and draws on Right-shore®, its worldwide delivery model.Rightshore® is a trademark belonging to CapgeminiFor more information, please contact:Bob Scott: BPM Global Service Line Leaderbob.scott@capgemini.comNikki Gordon Jones: BPM Marketing Managernikki.gordonjones@capgemini.comHester Decouz: Press Officehester.decouz@capgemini.comwww.capgemini.com/globalbpmreport

Capgemini Global BPM Report

by Capgemini

Accessibility

Categories

Upload Details

Usage Rights

1 Embed 3

Statistics

Capgemini Global BPM Report Document Transcript