Consulting   the way we see it




Trends in BPM
Eight state-of-the-art trends within the Business
Process Management work...
| the way we see it




Trends in BPM




Name author(s):
Hans Toebak
Frank van den Ende




Company name:           Capge...
| the way we see it




Preface
Almost five years ago, some colleagues wrote the booklet „Business Process
               ...
| the way we see it




Table of Contents
1   Introduction                                                             1

...
| the way we see it




1 Introduction
As the name of this publication indicates, in this booklet an overview is given of
...
| the way we see it




Trend 4. BPM as key element of a holistic approach to successful alignment
          of business a...
| the way we see it




unequivocal documentation of business understandings. However, the most
important relationship is ...
| the way we see it




2 Trends
This chapter contains a paragraph for each trend named in the introducing
chapter. Differ...
| the way we see it




2.1.2 Business process agility
Business processes are the cornerstone for providing services and p...
| the way we see it




IF a customer is new and applying for mortgage THEN customer may not be on
a blacklist


IF the am...
| the way we see it




In our example, applying for a mortgage product consists of two checks:
the blacklist check and th...
| the way we see it




2.1.7 Service Oriented Architecture
Service Oriented Architecture (SOA) is a method of building an...
| the way we see it




A SOA allows IT to build applications which are flexible and easily extensible.
Business rules man...
| the way we see it




2.2       Tooling
2.2.1 Introduction
One can roughly distinguish a limited number of directions th...
| the way we see it




Some examples of new features were:
   introduction of Activity Based Costing [2] method in the e...
| the way we see it




new way of working (Future State) is documented in a BPM Tool and
communication and implementing h...
| the way we see it




options, or one-size-fits-all solutions to business improvement. After all, BPM
systems (and the p...
| the way we see it




2.2.9 What do organisations want?
The answer on this question is two folded. At first organisation...
| the way we see it




2.2.12 Future
What will the future bring? At this moment one of the major trends is the
corporatio...
| the way we see it




By Eric Roovers, Business Development and Senior Consultant, IDS Scheer, The
Netherlands.
Not so l...
| the way we see it




                    ®4
2.3       BeLean , an approach to deliver results that last
2.3.1 Introduct...
| the way we see it




Adopting these three principles makes Lean a means to achieving sustainable
results – whether fina...
| the way we see it




People. „Do the work right‟: that is, ensure staff are fully trained, motivated, and
genuinely emp...
| the way we see it




  I.   Taking control: quick wins to create momentum and build a foundation of
       basic capabi...
| the way we see it




2.3.6 Implementing Lean
Having an approach is one thing, but actually implementing Lean can still ...
| the way we see it




2.4       BPM as key element in alignment of business and
          technology
2.4.1 Introduction
...
| the way we see it




2.4.5 Introduction of a holistic approach and role of BPM
A holistic approach for (re)alignment of...
| the way we see it




A last example is synergy of process-oriented thinking and service oriented
architecture (SOA). SO...
| the way we see it




   Manage business tasks across applications: what (objectives, processes and
    rules) are lead...
| the way we see it




2.4.7 Alignment of business and technology for management processes
In relation to management proc...
| the way we see it




For example, to improve process efficiency, methods like LEAN Six Sigma are
being applied to remov...
| the way we see it




All vendors provide common practice business content that accelerates
development and links each a...
| the way we see it




The growing maturity and consequent adoption of these IT frameworks is being
driven by two main fa...
| the way we see it




There is an apparent need to abstract process logic from technology and enable
business to drive I...
| the way we see it




[5] The five automation imperatives: a comprehensive look at Business Service
Automation, HP, 2008...
| the way we see it




2.5       BPM as crucial factor for outsourcing IT development
2.5.1 Introduction
Outsourcing the ...
| the way we see it




Business parties benefit from business analysts as they can provide knowledge on
the latest trends...
| the way we see it




about the well known fact that more than 90% of communications is non-verbal,
this aspect deserves...
| the way we see it




knowledge about the systems in use. For the IT professionals who stayed within
the companies, in m...
| the way we see it




Quite a difference in approach one might say! So if former IT experts with their
knowledge of the ...
| the way we see it




earlier in the process. They will be able to perform the complete business
analysis, instead of de...
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BPM – Business Process Management - is a discipline that attracts a lot of interest. Probably even more nowadays, because of the economic turmoil... By placing business processes on centre stage, companies can gain the capabilities they need to innovate, reenergize performance and deliver the value today’s markets demand. An enterprise where BPM is really implemented as a management discipline can make agile course corrections, embeds continuous improvement methods and reduces cumulative costs across the value chain. BPM supports the pursuit of today’s strategic initiatives, including mergers, consolidation, alliances, acquisitions, outsourcing and global expansion.
BPM discovers what you do and then manages the lifecycle of improvement and optimisation, in a way that translates directly to daily operation.
In a collaboration of Capgemini Technology and Capgemini Consulting the publication “Trends in BPM” is a collection of state-of-the-art trends Capgemini’s experts see in the BPM discipline. It includes topics like Lean, Human Centric Processes, process design for agility and Business Activity Monitoring.

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Trends In Bpm Site

  1. 1. Consulting the way we see it Trends in BPM Eight state-of-the-art trends within the Business Process Management working field.
  2. 2. | the way we see it Trends in BPM Name author(s): Hans Toebak Frank van den Ende Company name: Capgemini N.V. Place: Utrecht Date: August 2009 © 2009 Capgemini. No part of this document may be modified, deleted or expanded by any process or means without prior written approval from Capgemini
  3. 3. | the way we see it Preface Almost five years ago, some colleagues wrote the booklet „Business Process 1 Management: Introduction to the working field and supporting tools‟. The demand and enthusiasm for this booklet slightly surprised us, but emphasized our belief that Business Process Management (BPM) is a discipline that attracts a lot of interest. Probably even more nowadays, because of the economic turmoil... Encouraged by this success we decided to produce a sequel. The focus of this new publication is on state-of-the-art trends we see in the BPM discipline. Why this as the focus? In my opinion, by placing business processes on centre stage, companies can gain the capabilities they need to innovate, reenergize performance and deliver the value today‟s markets demand. An enterprise where BPM is really implemented as a management discipline can make agile course corrections, embeds continuous improvement methods and reduces cumulative costs across the value chain. BPM supports the pursuit of today‟s strategic initiatives, including mergers, consolidation, alliances, acquisitions, outsourcing and global expansion. BPM discovers what you do and then manages the lifecycle of improvement and optimisation, in a way that translates directly to daily operation. Whether you wish to adopt industry best practices for efficiency or pursue competitive differentiation, you will need BPM. Although this is primarily a book for business people, we do not shy away from technology topics, because the management of a company's business processes is inseparably about both business and technology. I hope that you will profit from the ideas and information we present, and your company will profit from your new ideas and inspiration... Finally, I gratefully acknowledge many colleagues who shaped, supported and otherwise contributed to this book, particularly Hans Toebak and Frank van den Ende, as the driving forces. René Roest, Head FS Consulting Europe & NL, Global Head Business Analysis. Utrecht, August 2009 1 ISBN 90-75498-72-1 ii
  4. 4. | the way we see it Table of Contents 1 Introduction 1 2 Trends 2 2.1 Process design for agility 2 2.2 Tooling 8 ® 2.3 BeLean , an approach to deliver results that last 15 2.4 BPM as key element in alignment of business and technology 20 2.5 BPM as crucial factor for outsourcing IT development 30 2.6 Process change on (big) wheels 41 2.7 Human Centric Processes – the next challenge for BPM 44 2.8 BPM and training 58 3 Point of View 63 3.1 Introduction 63 3.2 BPM as management discipline 63 3.3 BPM Maturity 64 3.4 BPM Infrastructure 65 3.5 Where is BPM heading to? 67 3.6 Recapitulation 70 iii
  5. 5. | the way we see it 1 Introduction As the name of this publication indicates, in this booklet an overview is given of trends we at Capgemini distinguish within the Business Process Management 2 (BPM) working field. These trends have been deducted from several surveys, researches and daily observations:  Results of Dutch BPM Survey performed by Capgemini & Hogeschool Utrecht in 2008 (Business Process Management in the Netherlands).[1]  Indications by international research and advisory companies.  Developments we see daily at our customers. We as editors realise that this list is never ending and never complete. However, we think that the trends included represent a current market view and will be recognisable for BPM professionals and managers. For all trends stated underneath, a separate paragraph is provided within the next chapter: Trend 1. Process design for agility Processes cannot – as done in the past – be designed to last for ages. They have to be agile in order to enable an organisation to adjust quickly (agile) to changing circumstances, new products etc. In other words: agility needs to be one of the key considerations in designing processes (including the supporting IT). Trend 2. Tooling One can roughly distinguish a limited number of directions the BPM tooling is developing into. What are those directions, why is this development there? To mention one example - Common BPM (drawing) tools versus BPM Suites. Another distinction that can be made is between tools that offer one stop shopping versus niche-tools. But do the clients need all these features and are they willing to pay? Trend 3. BeLean®, an approach to deliver results that last Companies are under constant pressure to deliver exceptional customer experiences alongside maximum efficiency. Customers rightly expect everything to be cheaper, faster and better; organisations therefore need to use all the means at their disposal to become more customer focused and at the same time leaner. What we see is that organisations now have a strong interest in proven process improvement methodologies like Lean. 2 BPM is a management discipline that requires and enables organizations to manage - plan, change and act - the complete revision cycles of their business processes, from process design to monitoring (measurement) and continuous optimization. 1
  6. 6. | the way we see it Trend 4. BPM as key element of a holistic approach to successful alignment of business and technology The continuous struggle for power between business and technology may be compared to a dancing couple where both want to be in the lead. Consequently, both dance partners are not in sync and often stumble or even fall. The solution could be to evaluate per dance style who has more experience and thus should guide their combined skills into the excellent performance both have in mind. Now, if we translate dance style into process type, can Business Process Management be the key element of a holistic approach to successfully align business and technology for an excellent business performance? Trend 5. BPM as crucial factor for outsourcing IT development Terms like Voice of the Customer and Voice of the Business become more and more important. These voices (requirements) will often be recorded at an early stage when a new information system is built. But in fact these requirements are already needed when (re)designing processes: the business process has to deliver in conformity with the requirements. The supporting IT solutions for their part have to be in line. Trend 6. Process change on (big)wheels Organisations have made the first steps in their BPM maturity. For instance, they have their processes documented. One of the next steps can be Business Activity Monitoring (BAM). Being (more) in control of your processes by measuring, analysing and continuous improvement based on real-life, real-time experiences. Trend 7. Human centric processes-the next challenge for BPM Nowadays BPM seems to be focused on processes that are limited in complexity/predictability as well as limited in number of parties involved. We see the trend that there is an interest shift to more complex/unpredictable processes where larger numbers of parties are involved. How are we going to deal with those when the traditional BPM does not seem to offer an appropriate solution? Trend 8. BPM and training BPM and education do not seem to be closely related. However, if you take a close look you will see that BPM will not be successful without proper training or education. Implementing the new designed business processes starts with education about the change. On the other hand BPM products can be a learning source in themselves. Although it looks like the eight trends do have only one connecting subject, BPM, the opposite is true. There are many cross relationships. For example BAM and process improvement method like Lean & Six Sigma both require measurement of operational performance data. Another obvious link is between requirements management and business & IT alignment. Both subjects need an 2
  7. 7. | the way we see it unequivocal documentation of business understandings. However, the most important relationship is of course: Business Process Management. For a closer look see figure 3, the BPM umbrella, in chapter 3. All the authors are experienced and skilled professionals working as consultants in different market sectors for Capgemini and Capgemini Consulting. Result of the cross sector selection of authors is a broad view/vision on BPM. We, as initiators and editors of this publication, hope that this publication amongst others will help readers, guiding them in their road through the BPM maturity stages as described in the concluding chapter. Hans Toebak Frank van den Ende Literature [1] Business Process Management in the Netherlands – Capgemini & Hogeschool Utrecht, 2008 Hans Toebak is Principal Consultant within the Operational Excellence practice of Capgemini Consulting. Frank van den Ende is Senior Consultant within the Financial Services Consulting practice of Capgemini. 3
  8. 8. | the way we see it 2 Trends This chapter contains a paragraph for each trend named in the introducing chapter. Different authors – all experts in their field – give their view on BPM trends from completely different perspectives. 2.1 Process design for agility 2.1.1 Introduction The world is moving fast. New market developments, mergers and acquisitions, and international competition ensure that traditional companies are looking for new ways to react fast on external developments. Corporations find that well- known strategies are not enough to stay in the front lines. The traditional generic strategies for success are being best at customer intimacy, being innovative or being a cost leader. However, we must realise that these strategies were defined in the 70s and 80s of the last century, in times when change was not as predominant as it is today. Several business drivers, such as globalisation and internet, are enforcing and still increasing the pace of change of the businesses. Change as such is becoming a dominant factor and the consequence is that the three generic strategies by themselves are not sufficient anymore. Changeability, or the speed and efficiency in which a company is able to react on external factors, is a determining factor for survival. The automotive industry is scrambling to produce green, fuel-efficient cars; a development that was unthinkable only a few years ago. Nowadays, agility is the keyword. An agile corporation is able to change its services and products at the same rate, or even faster, than is dictated by the market. Services and products are the outcome of business processes and therefore an organisation‟s agility is also determined by the agility of its business processes. A corporation that can „outchange‟ its opponent has a competitive advantage. Change is a thing of all times, but the pace of change in the world has increased to such a point that the change ability itself provides benefits to businesses. Corporations can choose agility as a strategic weapon against their competitors. Yet, change is experienced as difficult, time-consuming and expensive. Millions are spent already to change business and IT environments. Does agility mean that we need to spend even more on change? Clearly, spending more is not the answer in the current market circumstances where cost-effectiveness is one of the key issues. Instead of spending more, we need to apply our limited resources smarter. The basic idea is to spend resources not (only) to create change, but also to improve the change ability of the organisation itself. An agile corporation has incorporated change as a characteristic feature, and spends time and effort on improving the changeability of the organisation. This allows these companies to change fast and with less effort than their competitors. Considering the turmoil in many markets, it is a safe bet to assert that agility and survival are two words that go well together. 2
  9. 9. | the way we see it 2.1.2 Business process agility Business processes are the cornerstone for providing services and products to customers. No business change can be accomplished without changing the processes that bring forth these products and activities. Traditionally, business process design focuses almost exclusively on creating effective and efficient processes. Agility is traditionally not a design goal for processes. Business processes (and the supporting IT) are not designed for ease of change; the basic focus was on „getting things running‟ and not on „getting things ready for the future‟. This attitude is not sufficient anymore. Agility needs to be one of the key considerations in designing processes (including the supporting IT). This means that in the design of the business processes we should incorporate the necessary measures that make future change easier instead of more difficult. Theoretically, this sounds very good. Implementing change in such a way that also facilitates easier change in the future, allows large corporations to react on changing demands like small companies. But is this realistic? Is this possible? Are we able to make business processes and the products that they deliver flexible enough in a way that they support fast change? The following paragraphs describe some new developments in process design, and the supporting IT, which allows business management to implement processes, which are easily changeable. This is based on new insights in the strategic importance of change and also upon new technological developments, which allow supportive IT systems to change as fast as the business. If the processes and the supporting IT are not designed for change then an IT change cycle may take up multiple years. Business processes change typically much more frequently. As a consequence, the maximal change rate of a business process is often restricted by the limited pace of change of the underlying IT systems. How to break this bottleneck? How to make sure that, when changing processes, IT is not on the critical path? How can you bring agility into your organisation? In the following paragraphs, we discuss some new developments, which make agility a practical reality. 2.1.3 Agility in practice One of the most promising developments to implement agility is the use of Business Rules technology combined with a Service Oriented Architecture. 2.1.4 Business rule technology Business rules represent the business logic that underpins your business operations. Rules are representing the business knowledge you find in policies, regulations, and product definitions. For example, a bank can have a mortgage policy for their customers. New customers applying for mortgage may not be on a black list. For all customers there is a check on income if the requested amount is higher the EUR 10,000. This can be translated into the rules: 3
  10. 10. | the way we see it IF a customer is new and applying for mortgage THEN customer may not be on a blacklist IF the amount of requested mortgage is more than EUR 10,000 THEN check if income is sufficient A typical organisation uses several thousand business rules. Of course, not all the rules are equally important. Traditionally, the business rules of companies are implicitly embedded into the IT systems. The terms „implicitly embedded‟ are essential. It means that the key-rules of your company are scattered throughout hundreds of applications, containing millions of lines of program code. Any change in your business process means that the corresponding program code and data need to be identified, changed, tested, and taken into production. This costly process repeats itself over and over again for every business process change. It is not hard to understand that this process results in a maintenance nightmare – and the corresponding long change cycle times that many companies experience. Business rule technology changes all this. The objective of this technology is to store the rules centrally in one place, which makes it much easier to update and change them. Business process change is then limited (very often) to changing some statements in a business rule repository. This change process is far easier to conduct and test, compared to the complex application change-process. If, for instance, in the example given above, the limit changes from EUR 10,000 to EUR 100,000, then the only change required is the change of the number in the business rule. The process itself (including underlying IT) does not require any change at all! This is a major change from the old days when such rules were hard-coded in the software. 2.1.5 Defining and maintaining business rules Business rules are mostly written in a formal but still natural language, close to the business nature. They are maintained by one or more business subject matter experts in a rule repository. Although changing business rules in a business rules engine is far easier then changing them in a more traditional environment – think about the example of the changing credit limit. Still the complexity of business rules management is a factor, which should not be underestimated. To achieve business agility with business rules you have to organise business processes in terms of services and business goals. Instead of thinking in sequential procedures (the classic approach), you apply a more goal–driven approach to your business processes. 4
  11. 11. | the way we see it In our example, applying for a mortgage product consists of two checks: the blacklist check and the check on income. Business processes need to be considered as an orchestration of business services instead of sequential procedures. This is for many people an unusual way of considering their business. A set of business rules has to be complete and consistent. A small adjustment in a rule may affect the interactions between rules resulting in a different behaviour of a service. Starting with a small set and letting it grow incrementally is the best strategy for not being overruled by your own business rules. Business rules are acting like a steering wheel of your organisation. By turning it a little to the left or to the right your organisation will go towards the desired direction. 2.1.6 Business Rules and Agility Business rules are most effective for those business processes that are likely to change often. It is useless to create flexibility when there is always a fixed sequential dependency between two services. Take, for example, the business rule that your customer has to pay before you ship a delivery. When this is always the case, it makes sense to implement it hard-coded. The strategy is to use business rules in that area of your business where flexibility is needed the most, such as the front office of an organisation. This strategy decreases the overall number of business rules and, therefore, makes setting-up and maintaining the rule database easier. Furthermore, a more powerful usage of business rules technology is when the business rules engine uses inference techniques to achieve your goals. This mechanism walks through all the IF..THEN .. statements and selects only the relevant rules for execution. Therefore, if your business needs complex decision making based on many rules, business rule technology is just the right thing for your company. In the previous example, depending on whether the customer is new, the blacklists check will be selected by the business rule engine. 5
  12. 12. | the way we see it 2.1.7 Service Oriented Architecture Service Oriented Architecture (SOA) is a method of building and connecting applications, which allows maximum agility. As such, it is a perfect companion to business rules technology. How does SOA accomplish agility and why is a SOA IT environment more flexible than a traditional environment? The analogy of a supermarket versus specialised stores may clarify this concept. In the past, applications were built like supermarkets, where you were forced to buy every required item (bread, meat, vegetables, etc) in this one supermarket. This is a good solution, as long as there is little change in the provided services, because when the provided services change (e.g., the supermarket is also to sell cars) then the whole supermarket needs to be rebuilt. A Service Oriented Architecture can be compared to a situation with separate, specialised stores, where each store provides its own unique service. So you go to the greengrocer for your vegetables, to the butcher for your meat and to the baker for your bread. If you want to buy also cars, you go, in addition to this, to the car dealer. In traditional application development, a single large application provides all the required functionality. If this functionality changes, then the whole application need to be rebuilt, which is expensive, risky, and takes a long time. Service Orientation changes this. SOA splits up the totality of required functionality into small, individual services and, consequently, it becomes easier to add or extend services when required, without negative effects on the existing services. 2.1.8 Agility and SOA Because of this easy changeability, SOA and business rule technology go very well together. In our mortgage example, there are three SOA services; an Apply for Mortgage service, a Check Blacklist service and a Check Income service. Check Blacklist and Check Income function independently from each other. The Blacklist service, for one, just provides generic blacklisting functionality and does not „know‟ that it is part of an overall Apply for Mortgage service. Business rules describe how these three services collaborate, to provide an overall Mortgage service. This „isolation‟ of functionality in generic services is a main characteristic of a service-oriented architecture. 6
  13. 13. | the way we see it A SOA allows IT to build applications which are flexible and easily extensible. Business rules manage the sequence and relationships between services (the orchestration of the services) while individual services execute single business process tasks. Change in business processes – for instance interchanging two business process steps – affects only the business rules, not the underlying services. In the previous paragraph we saw that changing business rules is relatively easy, compared to application change. Adding new services is also straightforward, because no existing services need to be rebuilt or adapted. This increases the speed of change of business processes considerably. Experience shows that – in an SOA environment –process changes are far re easier to implement, because up to 80% of the underlying services can be reused. Consequently, the reuse of services reduces the required effort for building new applications considerably. 2.1.9 Summary and conclusions Business rule management and service oriented architecture, bring together two apparently contradictory business goals; the ability to innovate and change fast, in combination with a low-cost operation. Being able to change your business processes fast and without excessive costs, is nowadays a premium characteristic for corporations. Agility as a strategic objective should be considered as a key asset. Organisational changes (sourcing, shared service centers, centralisation or decentralisation) may require major changes in processes and supportive systems, but agile companies can absorb these changes without being overturned by them. This chapter gave an overview of the state-of-the-art thinking and technological possibilities to achieve organisational agility, which is both practical and feasible. Using new insights into the nature of organisational agility and new technology, companies are implementing agile business processes that will help them to grow and survive in the dynamic business environment of the 21st century. Raymond Slot is Principal Consultant and certified Enterprise Architect. He is lead author of Capgemini´s security architecture method. Yvette Hoekstra is Senior Consultant at Capgemini and certified business architect in the area of business rules and business process modelling. 7
  14. 14. | the way we see it 2.2 Tooling 2.2.1 Introduction One can roughly distinguish a limited number of directions the BPM tooling is developing to. What are those directions, why is this development there, what is the difference between a Case Management Tool versus BPM Suites? Tools that offer one stop shopping versus niche-tools… In this paragraph the author will discuss these developments. 2.2.2 A glance at history The early 1980's can be seen as the start of the ICT revolution. The prices in ICT dropped to a fairly low level which stimulated the development of new software. Computer technology made its appearance in the administrative processes of the trade and industry business. And was here to stay. One of the results of the introduction of more and more automated processes was an increasing complexity of these processes. In order to diminish this complexity a new software program was developed by Capgemini in the Netherlands, named SDW- AO. With this software it became possible to document all your business processes. The success of this first Dutch BPM Tool was rather great, mainly because of the fact that the ideas of the Dutch guru in the area of Internal Control R.W. Starreveld [1] suited very well upon the method of designing the business processes. Many internal controllers and accountants were very pleased. At the same time there were limited possibilities to adjust the modelling method. This brought many developers in desperation. A call for new tools became louder. This was the start of the Dutch BPM hype. At first the tools were mainly focused on documenting business processes and organisational charts, whereas publishing was only possible on paper. The 3 features of the tools quickly increased with new ideas like: RACI matrices , generated formbooks and so on. New model techniques and methodologies were introduced quickly. 2.2.3 Methodology / techniques In the beginning the five-column-structure (also known as SIPOC: Supplier, Input, Process, Output and Customer) was leading and widely used. Soon new techniques and methodologies were introduced. Tool vendors quickly reacted on these new developments and integrated them in their tools. Sometimes the methodology followed the technique, sometimes the opposite was true. 3 RACI: Responsible, Accountable, Consulted, Informed. 8
  15. 15. | the way we see it Some examples of new features were:  introduction of Activity Based Costing [2] method in the eighties;  adding ISO certification standards (end of 1980's);  integration of risk management modules (begin 1990's);  combination of Work Flow Management and Document Information System (end of 1990's). It is obvious that most of these methodologies were successful in the market, but mostly, only for a while. The comparison with the fashion industry is easy. At one time you're hot, the next moment you're not. A few methods and techniques will always be successful, but is it possible to answer the general question: do methods and techniques make their promises true? 2.2.4 From Tool to Suite The addition of new methods and techniques is not the only development tool vendors made. Better and improved graphical user interfaces, supporting databases or repositories can be mentioned, and of course extensive publication methods like companywide intranet pages and personal webpages. These developments are visible on the BPM Tooling side of the landscape. Examples of such tools are: Aris, BWise or Casewise. But this is not the only shift in the BPM landscape. See figure 1 for the expanding possibilities of BPM software tools. At the other end of the BPM spectrum the execution of designed processes is getting more and more attention. A BPM Tool shifts to a BPM Suite at the moment that documented business processes can be made executable with the tool (or in combination with another tool). Examples of BPM Suites are Cordys and Pegasystems. In theory, in these cases there is an alignment between business and IT. You can find more about business and IT alignment in chapter 2.4. 2.2.5 Added value of tool The acquisition of a new BPM Tool or Suite is not a Friday afternoon decision. Normally a well-considered choice is made, but the managers‟ personal favourite is often the lucky one. But what can be said about the added value of a tool or suite? Is the business case valid or isn't there a business case at all? The added value of a tool is completely dependent in which way it is embedded in an operational way. Sadly it is our experience that the acquisition of a tool is serious business, but the road does not stop there. On the contrary: it is the beginning of a long and compelling path. And it is exactly on this path that you can win or lose the most. Unfortunately little time and resources are available in this stage. Just by investing in time and money, for example in communication and implementation of the new designed way of working, many people should be involved. Otherwise the ROI will be low, and involved people will be dissatisfied. Luckily in more and more projects the significance of the communication and implementing phase is gaining importance. Let's take an example of a transformation from a Current State (Ist) to a Future State (Soll) situation. The 9
  16. 16. | the way we see it new way of working (Future State) is documented in a BPM Tool and communication and implementing has been successful. The added value can be expressed in terms of: - a clear sight on the 'End-to-End' processes, in line of the vision - mission of the company; - better alignment between business processes, resulting in a shorter time to market; - clearly defined and published responsibilities. But even after a successful implementation it is hard to determine what the exact amount of added value in Euros is. Is it possible to determine how much clearly defined responsibilities are worth? At the end this is only possible when a clear potential risk has been prevented. Some tools are offering a Return On Investment calculation. For example IDS Scheer (Aris) offers Business Maturity Assessment Services. With this framework the business case of the BPM investment can be well founded. 2.2.6 Business Rules Another positive development is the introduction of business rules management. More and more organisations are asking for a combination of process descriptions, and clearly distinguished business rules. Unfortunately however, we also notice that business rule management and business process management are increasingly being pitched as competing 10
  17. 17. | the way we see it options, or one-size-fits-all solutions to business improvement. After all, BPM systems (and the processes itself) are based on rules, and business rule engines can execute actions without a BPM system. In reality, BPM suites and business rule management systems serve fundamentally different and complementary purposes. In many cases, you need to use them together to fully achieve the goals of agility, alignment, compliance and the rest. The trick is striking the proper balance: Which rules are the domain of the BPMS and which are managed by the BRMS? What actions should be taken by the business rule engine, and what should be left to the process engine? Several new tools are emerging in the market and almost all of the established tools are offering a business rule engine. Chapter 2.1 will go deeper in detail concerning this subject. 2.2.7 Many different vendors Although all the leading analyst firms publish on a frequent basis the 'best BPM vendor reports', they do not seem to add very much value to the BPM landscape. The BPM tool /suite market can be characterised as an enormous diversity of tools/vendors, with lots of local players. A good comparison is almost impossible. Just in recent years a globalisation trend is visible. The large vendors are able to concur the global market and their sizes are increasing. Nevertheless lots of vendors have a strong home market. For example Casewise is leading in the UK, Aris widely spread in Europe and in the Netherlands Mavim and BWise are strong competitors. Above all the comparison of tools is similar with the comparison of cars. Only after determination of the main goal of the car (for instance a car can be used for daily work traffic or just for doing the groceries) the best car can be selected. Exactly the same is applicable for BPM comparison. The comparison is only valid when the main goal of the tool is established and this should be fully aligned with the organisation‟s strategy and objectives. So there is no such thing as the best tool or car. 2.2.8 BPMS As stated above the introduction of BPM Suites is a fact. A BPMS combines the functional modules with possibilities to translate the process designs to an executable infrastructure, of course with periodic synchronisations. The introduction can be seen as a major change in the BPM landscape. Just some years ago there was a strict distinction between modelling and execution. Nowadays this can be a vague line. In combination with a Service Oriented Architecture this offers a great opportunity for business and IT. Will there be the long wished business and IT alignment? Technically this is possible, but are organisations willing to transform? 11
  18. 18. | the way we see it 2.2.9 What do organisations want? The answer on this question is two folded. At first organisations want to be in front and show the world that they have implemented a 'State of the Art' technology, way in front of competition and with a strong competitive advantage. Examples of these advantages are a short time to market, meet all the compliance regulations or scoring low on bad news. On the other hand organisations are cautious in spending money on BPM (software). Unfortunately there are little examples of a full utilisation of the BPM opportunities. In most cases a progressive management (there is more than short term thinking) is the motive behind a BPM project (read investment), not only in money but also in allocation of resources from start till implementing the project. Also in less economical periods advantages can be obtained, on the contrary: exactly in these periods a stronger position can be achieved. 2.2.10 What do clients need? Organisations nowadays seem to focus too much on a generic approach. 'One size fits all' is not the way. The transition path has to be in line with the professionalism of the employees. In a production plant more effort goes to explanation or training of the new way of working, combined with detailed process instructions, while for a knowledge worker detailed instructions would block his creativity. Lawyers are used to read massive text pages and architects like to look at a diagram. So not only the right tool is important, selecting the suitable methods and techniques is a critical success factor. Perhaps the newly introduced Human Centric Processes principles described in paragraph 2.7 can be helpful for successful implementation a new way of working. 2.2.11 Process-on-the-fly According to TechnoVision 2012 [4] of Capgemini, 'Process-on-the-fly' will be the next major improvement in the business processes management environment. New technologies enable analysts to quickly simulate, describe, model, execute and manage business processes [page 5 of TechnoVision]. This expanding flexibility offers great competitive advantages for early adopters. Perhaps this will be one of the differentiators in a competitive world. Process simulation, or Process Scenario Analysis, will play a dominant role in 'Process-on-the-fly'. Only a validated process can quickly replace the current state situation. Validation by simulation can be fast and reliable. But, several conditions have to be fulfilled: - Getting insight into complex environment/processes (with many parameters). - Process models must be enriched with correct statistical data and the right facts and some assumptions are needed to be made (garbage in is garbage out). The most important effort is to build the model in a simulation environment. After succeeding these conditions, decision making will be easy and profitable. 12
  19. 19. | the way we see it 2.2.12 Future What will the future bring? At this moment one of the major trends is the corporation between BPM Tools and BPM Suites. Examples of this combination are: BWise - Cordys and Aris - Pegasystems. In these combinations 'The best of both Worlds' will be combined. Probably this will be the power of the next generation BPM: collaboration or/and complementing between 'old' and 'new'. Not only the vendors will transform but also their clients‟ need a change of mindset (from 'floor workers' to 'boardroom'). So they will be able to shift quicker between the current state and the future state situation. Only then a BPM investment will be profitable. 2.2.13 Summary and conclusion The development of BPM tools or suites can be illustrated on the Capability Maturity Model [5]. In the 1980's beginning in stage 1: the initial stage, followed by level 2: Repeatable in the early 1990's. The Defined stage (level 3) is just before and after the Millennium. On this very moment the BPM tool market is in level 4, the managed stage. The last maturity level (Optimising) will follow, but when and what will this brings? At this moment none of the vendors has a crystal ball as functionality, so ... only the future can tell. Note: the described experiences with the different vendors are based on the personal opinion of the author. Literature [1] Bestuurlijke informatieverzorging Deel 1 Algemene Grondslagen Prof. R.W. Starreveld R.A. [2] Activity Based Costing by Robert Kaplan and Robin Cooper [3] Picture from ‟The State of Business Process Management‟ February 2008, BP Trends [4] Capgemini TechnoVision 2012, Bringing Business Technology to Life, 2008 [5] CMM, Capability Maturity Model, published as Managing the Software Process in 1989. Frank van den Ende is Senior Consultant within the Financial Services Consulting practice of Capgemini. He is responsible for the Special Interest Group BPM Tools. 13
  20. 20. | the way we see it By Eric Roovers, Business Development and Senior Consultant, IDS Scheer, The Netherlands. Not so long ago BPM was thought to equate the documentation of business processes for quality management and internal control. Now we see that BPM has become an active design instrument for the business operating model. BPM tools have matured with that trend. To name a few developments of recent years:  The sometimes radical process reengineering of the previous century has been superseded by process optimisation methods such as Lean Management and Six Sigma.  In a time when transparency and compliance are ever more important, business processes form the basis for the identification of risks and the implementation and testing of controls.  Process mining techniques enable a thorough analysis of how business results are achieved, by visually reconstructing the actual process narrative.  New SOA-related technologies make it possible to use the business process as the blueprint for service orchestration. With this, previously unattainable quality and flexibility levels can be achieved.  Finally, business processes are becoming a key element in the development of enterprise architectures, which has become imperative to control the complexity of modern business management. These developments fit in a trend to not only measure business performance by financial standards, but to seek out, in-depth, the opportunities to improve the organisation. With today‟s BPM tools, organisations can establish the impact of changes much better and plan their actions accordingly. With that, BPM tools have acquired a key position in the strategic and tactical management of modern organisations. About IDS Scheer: IDS Scheer is the global leader in independent business process and performance management - software and solutions - and a globally renowned service provider for process driven business transformation and implementation. IDS Scheer experts combine methodology, industry and process management know-how. With its ARIS Software, IDS Scheer is the worldwide market leader in business process analysis and optimisation. ARIS delivers measurable improvements of customers' business performance on a vendor-independent platform. 14
  21. 21. | the way we see it ®4 2.3 BeLean , an approach to deliver results that last 2.3.1 Introduction Especially nowadays, in the current economic turmoil, companies are under constant pressure to deliver exceptional customer experiences alongside maximum efficiency. Customers rightly expect everything to be cheaper, faster and better; organisations therefore need to use all the means at their disposal to become more customer focused and at the same time leaner. The methodology named Lean offers to help companies achieve exactly that transformation. Lean optimises workflow and eliminates waste through employee involvement and continuous improvement, always with a focus on the customer‟s definition of value. Although Lean has its origins already in the 50s when Toyota first started the Toyota Production System (TPS), organisations nowadays seem to have more and more interest in proven process improvement methodologies like Lean in order to achieve sustainable results. As budgets become tighter and cost effectiveness can become a competitive advantage for companies, Lean‟s most appealing aspect is the promise of improved efficiency without negative customer impact. Even the most efficient companies still have room to eliminate waste. Indeed, Toyota, founder of modern Lean thinking, accepts that over 70% of its own activity can still be categorised as waste. 2.3.2 Tailoring Lean for success At present, some justified scepticism surrounds Lean. Certain organisations have attempted to transplant a Lean approach from manufacturing to the service sector in a compartmentalised and minimised way, and disappointment has followed, as in the infamous „black tape and active banana‟ stories that hit the UK press in 5 early 2007. In our vision there are three related principles regarding the use of Lean that can help organisations to avoid these pitfalls: 1. Lean must bring about behavioural change. It follows that: 2. Lean must be tackled holistically, focusing on people and organisation as well as processes and that: 3. Deployment must be progressive – it must happen level by level, according to a coherent roadmap. 4 BeLean® is a registered trademark of Capgemini B.V. and describes Capgemini‘s approach to Lean Delivery 5 See for example ―The £7 million guide to a tidy desk‖, The Times, January 5 2007 http://www.timesonline.co.uk/tol/news/uk/article1289640.ece 15
  22. 22. | the way we see it Adopting these three principles makes Lean a means to achieving sustainable results – whether financial, operational, cultural or all of these. We call this approach „BeLean®‟. 2.3.3 Achieving behavioural change Past attempts to implement Lean have often paid insufficient attention to the human aspect. Especially for service organisations, the customer experience is determined largely by customers‟ interaction with the staff, so that effectively the people are the process. In our experience, 80% of Lean benefits result from changes to people and only 20% from tools and techniques. It is behavioural change that really makes a BeLean® implementation sustainable. Certain behavioural aspects of Lean are somewhat counterintuitive. In particular, BeLean® assumes that it is the worker who is best placed to improve the process; the manager is a servant of the worker, improving the wider organisation to facilitate what the workers would like to do. Because this idea appears to go against Western-style organisational hierarchies, it is sometimes greeted with scepticism. In order to overcome any such resistance, one should work with people at all levels of the organisation to explain BeLean® thinking and implement the behavioural change it implies. Employees on the front line are given the motivation, tools, and freedom to make sensible improvements to their daily work. At last, they feel ownership and a sense of contribution. Managers need to understand how to stop micro-measuring performance and look instead at the bigger picture. Because they are now aiming to improve the end-to-end process, the managers start to deal with the wider organisational issues that currently prevent the worker from achieving continuous improvement. For example, the team leaders and management of a customer contact centre become less concerned with the number of calls processed by agents and instead rightly focus on the root causes of the call volumes, and on how repeat calls can be reduced. 2.3.4 Tackling Lean holistically To achieve the necessary behavioural changes, it is necessary to consider process, people and organisation together (figure 1). More common Lean approaches focus on applying tools and techniques to processes, to the exclusion of all else. By contrast, the BeLean® approach works across all three areas. Process. The motto here is „do the right work‟: that is, only do what adds value in the eyes of the customer. For example, customers would not want to pay for transporting documents between buildings, or for handing off an application to another department (with the delays that implies); that type of work can often be eliminated first. 16
  23. 23. | the way we see it People. „Do the work right‟: that is, ensure staff are fully trained, motivated, and genuinely empowered to make appropriate changes. It is better to identify missing skills and then ensure effective training than to give „must do better‟ pep talks. Organisation. „Manage the right way‟: that is, support the people who operate the process with the right measurements, technology, recognition, and organisational structure. Measurements should help teams to understand their achievements in terms of what the customer needs. For example, in our customer contact centre, does „average call time‟ really help us improve our customers' experience? Surely „number of calls resolved on first contact‟ would be a more effective measure of performance. Sustainable Results via via Behavioural Change Ornage tt Orn g Ornage t Do the work right Ma Do the work right Ma a or k rk ga he ga he r riig s s ga e r People wo htt w niis gh niis riiigh tthe ce n n s ht h rg Do ro atiht way at w a y at a at w a he P Do P on on o on The holistic approach makes for sustainable results because the three strands reinforce each other rather than conflicting, as can happen if process is changed without sufficient attention to people and organisation. The aim is to make every worker think: „I feel fully competent to do my job, I see that my manager supports me, and I have the motivation to make it even better.‟ 2.3.5 Deploying progressively Sustainable results are a consequence of behavioural change, which does not happen overnight. Therefore it is clear that a progressive approach to deployment – taking one level at a time - will build a stronger result. A roadmap is required, and so it is recommended to think about BeLean® in terms of the three levels shown in about figure 2. 17
  24. 24. | the way we see it I. Taking control: quick wins to create momentum and build a foundation of basic capability from which to progress. II. Creating excellence: delivering transformational results. III. Sustaining leadership: embedding the Lean culture into the new business. There are several reasons for visualising BeLean® as a pyramid. One is that pyramids are built systematically from the bottom up: starting at the top is certainly not practical. Similarly, with BeLean®, it is best to build the people, process and organisation blocks within a single level before shifting one‟s priorities to blocks in the next level. A common mistake is to keep working on one aspect – typically process – without addressing the related people and organisation issues. Changing the process flow without an equal emphasis on staff buy in, or on metrics to support the new process, is generally disastrous. Like a pyramid, a BeLean® implementation should be built to last. Among other things, this means that even when the top is reached, it is still necessary to keep maintaining the foundations to prevent unseen erosion. All successful BeLean® programmes create a culture of continuous improvement – a legacy that enables the organisation to respond to subsequent changes in market conditions. 18
  25. 25. | the way we see it 2.3.6 Implementing Lean Having an approach is one thing, but actually implementing Lean can still be a challenge… A BeLean® implementation is ideally organisation-wide, but can also be undertaken on a smaller scale, for example within a chosen function, and scaled-up thereafter. A BeLean® engagement normally consists of two phases, diagnosis and deployment. The diagnostic phase is valuable because it helps to ensure that BeLean® is implemented in a way that makes sense for the specific organisation. By taking a close look at the organisation and its market first, one can customise the approach to address the most pressing needs of the marketplace, and to help the organisation achieve its strategy. 2.3.7 Summary and conclusion Although some people think of it as new, Lean is a proven approach with its origins at the start of the industrial age. In particular in the service sector however, the results achieved not always were as expected. Successful adaptation requires three related principles: achieving behavioural change, a holistic approach and progressive deployment. In this way sustainable results can be achieved, and delivery of lean productivity improvements as in excess of 20% can become reality. Hans Toebak is Principal Consultant within the Operational Excellence practice of Capgemini Consulting. 19
  26. 26. | the way we see it 2.4 BPM as key element in alignment of business and technology 2.4.1 Introduction This book is about trends in BPM – a domain, no misunderstanding there, as highly valued by the authors of this chapter as by the other authors let alone readers of this book – along with countless supporters all over the globe. Still, this chapter will clarify that BPM is one and only one – albeit essential – part constituting a holistic approach to successful alignment of business and technology. Rather than as all-embracing „centre of the universe‟, BPM is positioned as part of a „constellation‟ of collaborating domains creating maximum added value for enterprises, their partners and customers. 2.4.2 Alignment of business and technology is vital Enterprises that effectively align business strategy and objectives with technology solutions achieve competitive advantage. On the one hand alignment enables agile business models permitting fast go-to-market of products and services as well as rapid response to changing market demands thus increasing effectiveness and revenue. On the other hand alignment facilitates better design, development, implementation and maintenance of IT solutions through standardisation, rationalisation and reusability thus allowing for a cost-effective system landscape. 2.4.3 Misalignment of business and technology is common Enterprises engaging in projects classically risk divergence of business modelling and supporting technology solutions thus not achieving business objectives. Business modelling typically concerns strategy, objectives and process flows. Technology solutions characteristically involve package specific customising or even custom development, mostly complemented by separate relevant documentation. In view of disparate tools used, guarding consistency within a project is a formidable challenge in itself. Given multiple business models and numerous technology solutions in subsequent projects and continuous improvement, ever-increasing misalignment is practically inevitable. 2.4.4 BPM facilitates structural realignment of business and technology BPM considers enterprises in terms of cross functional end-to-end business processes, allowing for a homogeneous, methodological integration from functional design to technical execution in underlying application systems. In conjunction with enterprise modelling of strategic objectives and organisational aspects as prescribed by architectural principles, full realignment from strategy to execution can be achieved. 20
  27. 27. | the way we see it 2.4.5 Introduction of a holistic approach and role of BPM A holistic approach for (re)alignment of business and technology is based on a close collaboration of three major domains:  business performance improvement (including BPM),  enterprise architecture (including business, information, information systems and technical infrastructure) and  technology development. This combination of concepts in architecture, business analysis, process modelling, implementation and maintenance as well as performance management is required to enable structural and integral alignment and flexibility in business and technology. In turn, this is as enabler for excellent business performance management and thus excellent business results. Vital contribution of BPM is application of process-oriented thinking on all domains enabling business and technology alignment and continuous business performance improvement. Such a holistic approach – supported by proper tools – is ever more becoming reality. For example, by applying process oriented thinking to business performance management, process improvement methods like LEAN Six Sigma are nowadays very often supported by BPM tools that also provide process performance data necessary for continuous improvement. Also, BPM tools establish process- oriented thinking in architecture, enforcing execution of business services by consuming process models in execution platforms. Thus, business and technology are synchronised: both refer to business objectives supported by processes and measured by key performance indicators (KPIs). Another example of emerging cross-domain alignment is business rule management (BRM). BRM aims to define, deploy, execute, monitor and maintain the variety and complexity of decision logic used within an enterprise. These business rules include policies, requirements and conditional statements used to determine tactical actions taking place in real-life business and application systems alike. Extracted and explicit rules contribute to alignment of business and technology terminology. When applied adequately, changes in business rules have little or no effect on process design and execution resulting in flexible business processes. 21
  28. 28. | the way we see it A last example is synergy of process-oriented thinking and service oriented architecture (SOA). SOA is a paradigm for organising and utilising distributed capabilities that may be under control of different ownership domains, meaning that business logic is encapsulated in several small and reusable services that can be accessed and combined into processes by internal and external parties via generic interfaces. In a SOA style architecture, process changes only have limited and targeted impact on system implementation and execution reducing time to market and total cost of ownership. Above examples show how business and technology domains become 6 increasingly aligned and information technology becomes business technology : a true enabler of business performance management and continuous improvement by reducing time and effort of adequate responses to dynamic business contexts and increasing opportunities for alternative business models (see figure 2). 2.4.6 Introduction of key domains and role of BPM Business technology is supported by a new generation of tools enhancing business results, flexibility and configurability and linking system functionality directly to strategic objectives. From a BPM perspective the following features are most relevant:  Direct traceability from business objectives and (process) models to technology support; 6 The term ―business technology‖ was originally proposed by Forrester (see ―Business Technology: Do Business Execs Get IT?‖ by Laurie M. Orlov, with Bobby Cameron, Bo Belanger, Forrester, September 13, 2006) and is also principal subject of Capgemini TechnoVision 2012 [0], predominantly aiming to better understand how emerging technologies are linked to business drivers to properly prioritise focused development of required capabilities and timely adoption of new technologies. 22
  29. 29. | the way we see it  Manage business tasks across applications: what (objectives, processes and rules) are leading instead of how and where;  Manage by exception: involve business users in automated processes using alerts in case of exceptions (both technical and business);  Integrate/ automate business processes: integrate business applications and automate message flow between systems with an executable process model; through various concepts:  Direct link between business model design and solution by integrating business design tool and business execution tool based on open standards or having both in one comprehensive tool;  Explicit, cross-component BPM layer handles processes where message flow between different business applications is dependent on multiple parallel events like several simultaneous messages, time trigger and business (re)actions;  Universal work lists where users access their process “to-do” lists spanning a range of business activities from administrative to more in-depth processes;  Intelligent routing based on flexible business rules and automated execution of process steps;  BAM delivering KPI information for continuous process improvement and real-time management dashboards for operational and tactical management. Maturity of business technology and approach to alignment of business and technology is dependent on process type involved and are discussed below. Following process types are distinguished:  Management processes: processes that govern operation of an enterprise;  Primary processes: processes that constitute core business and main value creation;  Supporting processes: both administrative and governance processes supporting primary processes. Figure 3 provides a concise overview on business coverage and technology support by process type. 23
  30. 30. | the way we see it 2.4.7 Alignment of business and technology for management processes In relation to management processes, technology support focuses mainly on getting insight into business performance and having means to implement continuous improvement and enforce and audit compliancy (“doing the right things”). Due to the rise of balanced score card and process performance management, business performance is not only measured based on financial performance indicators but has been augmented by additional performance data, in particular operational KPIs. Ever-increasing speed and competitiveness of current business environments demands near real-time insight in business performance to timely anticipate new situations. Management dashboards provide such information based on data gathered by business activity monitoring (BAM) without having to pass time- consuming detour via data warehouses. BAM is gradually becoming a standard functionality of BPM tools and industry packages that are being used to support primary processes within an enterprise. Support of management processes is highly dependent on data gathered during execution of primary and supporting processes. In order to get the right information, performance management requirements have to be incorporated in business and technology design of these processes using BPM. 2.4.8 Alignment of business and technology for primary processes Typical business drivers that apply to primary business processes are frequently changing rules and regulations, mergers and acquisitions, continual process and quality improvement. Therefore business and technology support is moving towards process efficiency, agility and enabling continuous business performance improvement. 24
  31. 31. | the way we see it For example, to improve process efficiency, methods like LEAN Six Sigma are being applied to remove inefficiencies in process design (“doing the things right”) and execution of new processes is being enforced via BPM tools. A steadily growing market trend is use of Straight Through Processing (STP) to execute processes without any user interaction where applicable. STP is presently supported by almost all BPM vendors. In combination with LEAN Six sigma, STP drastically decreases process duration and execution costs. The automation of primary processes follows a top-down approach that is also supported in both custom development and package based solutions. Making 7 processes agile by introducing BRM and SOA as described earlier is also applicable to primary processes. In custom development, some good examples of approaches enabling a close business and technology alignment based on processes and business rules are Capgemini Model Driven Architecture (MDA, based on OMG), IBM Information Framework and Pegasystems Solution Frameworks. All of them are starting with modelling the to-be situation using open standards and deriving requirements from this new business model. In order to accelerate solution development, reference models are used containing common practices of several industries. Each functionality within these business models is linked to business processes, business rules or business objectives. This approach offers direct traceability from business objectives and business (process) models to technology support and optimal alignment of business and technology in the to-be situation. In package based solutions, process orientation also becomes ever more explicit. Using BPM, enterprises can effectively combine sector know-how documented in reference models for architecture and processes on the one hand and packaged industry solutions and business rules in application suites on the other hand. Starting point is enterprise modelling including process design in conjunction with related architectural principles, strategic objectives, organisational aspects, information objects, application systems including transactions and/ or services and technical infrastructure in third-party tools like IDS Scheer ARIS platform or IBM Telelogic and WebSphere Business Modeler. More limited process design is also possible in embedded modelling environments supporting open standards, like SAP NetWeaver Composition Environment. 7 Despite rising SOA paradigm, hybrid environments involving both service oriented and ‗classical‘ transaction based implementations of application systems will be predominant for many years to come. 25
  32. 32. | the way we see it All vendors provide common practice business content that accelerates development and links each application functionality to its corresponding business process component. For custom development and package based solutions alike, following an open standards based transfer to a run-time environment functional process design is enhanced with further technical details such as exception handling to prepare processes for execution. Based on monitoring, processes can finally be optimised, possibly after root cause analysis and simulation, closing the loop of continuous adaptation to consistently meet changing business requirements. From the viewpoint of primary processes, ever-increasing support of process orientation, rules and service oriented architecture within both custom development and packages based solutions enables a top down business improvement approach using BPM providing real process flexibility and a close alignment of business and technology. 2.4.9 Alignment of business and technology for supporting processes Much of current BPM focus is on (mostly top-down) alignment of business and technology in support of particularly primary as well as gradually management processes as described above. Yet there is another, quite similar process orientation emerging from a different, perhaps somewhat unexpected perspective: technology underlying supporting processes, in particular IT governance. All major vendors in latter field are increasingly enabling and 8 promoting business service management and IT process management, aligning 9 ever more closely to widespread standards and best practices . 8 Business Service Management is a comprehensive approach to unifying and standardising IT work. It creates a common, enterprise-wide view of each business service and enables automation of change and compliance across all devices that make up a business service. It connects IT processes, coordinates siloed teams via common workflows and integrates with monitoring and ticketing tools to form a complete, integrated business service management solution best supporting business. 9 Three specific IT governance practices and standards that have become widely adopted across the globe are: ITIL V3—Published by the UK government to provide a best practice framework for IT service management. The chief benefit of ITIL is standardisation of processes and concepts ensuring a shared understanding and offering proven solution models. In turn, this enables additional benefits in the form of cost savings, enhanced quality and greater customer satisfaction. CobiT 4.1—Published by ITGI and positioned as a high-level governance and control framework. Due to its high level and broad coverage and because it is based on many existing practices, CobiT is often referred to as the ‗integrator‘, bringing disparate practices under one umbrella and, just as important, helping to link these various IT practices to business requirements. ISO/IEC 27002:2005—Published by the International Organization for Standardization (ISO) and International Electrotechnical Commission (IEC) and derived from the UK government‘s BS 7799, renamed ISO/IEC 17799:2005, to provide a framework of a standard for information security management. 26
  33. 33. | the way we see it The growing maturity and consequent adoption of these IT frameworks is being driven by two main factors. One is growing demand for improved quality, reliability and transparency as well as better control over IT activities in response to ever-increasing security, availability, performance, regulatory and contractual requirements. Another is ongoing concern over generally increasing IT (administration and management – not as much hardware) expenditures. Implementation of standards and best practices should be tailored, prioritised, planned and managed to match specific requirements given business context and other methods in use in the enterprise to ensure cost-effective and well-controlled IT delivery. One could even argue that process orientation is more advanced than in technology underlying management and primary processes. There, process logic was historically enclosed in quasi-intelligent data marts and back-end application systems and is only fairly recently being partly abstracted from technology in view of rising service oriented architecture paradigm. Still, resulting management and primary process implementations largely are vendor proprietary, package- based solution vendors‟ approach to hybrid environments is yet ambiguous, and both are bound to specific application system run-time environments. All that glitters is not gold in IT governance either. Vendors have moved bottom- up from backward-looking performance and availability monitoring of single and separate application services and infrastructure components to proactive performance and availability control of multiple and integrated IT services and processes. However, they have developed proprietary instantiations of aforementioned IT frameworks using bespoke workflow and technical process descriptions that at best can be imported one-directionally from a functional process model. On the other hand, more business-oriented tools have moved top-down from modelling and analysis mostly for primary processes to process performance management for various process categories. However, they may have implemented existing IT frameworks concepts for use by business but are still expanding functionalities to provide necessary links into execution that service management vendors have been developing and integrating for years already. More often than not, technology function is still fragmented both organisationally and process-wise as it is based on support of disparate IT capabilities rather than delivery of integrated services and processes. Hence, a clear and consistent definition and implementation of roles and responsibilities is essential in business aspect of IT governance processes. Existing well-regarded IT frameworks may help to define roles and responsibilities for effective IT governance of all process types. BPM offers suitable instruments for successful implementation and management. By adopting such a business focus, IT governance can achieve desired control over complexity, compliance, and costs. 27
  34. 34. | the way we see it There is an apparent need to abstract process logic from technology and enable business to drive IT governance processes using BPM as in other process types. Another requirement is that top-down business practices are used in conjunction with bottom-up IT framework implementations using BPM for a proper application of technology in support of IT governance (“best of both worlds”). 2.4.10 Summary and conclusion A holistic process-oriented approach that allows for a homogeneous, methodological integration from strategy to execution and enables structural and comprehensive business and technology alignment –supported by process- oriented tools – is ever more becoming a reality. There is a clear analogy to both business and technology in support of various process types: all require closer alignment to maximise added value for enterprises. However, this chapter found that history, status, and approach in relation to BPM differ per process type and needs realignment in itself to prevent “silos of business and technology alignment”. In brief, BPM is at the pivoting point of further developments – both horizontally (top-down and bottom-up in each process type) and vertically (integration of various process types) – towards better alignment of business and technology. Realigning BPM by broadening scope to different process types, combining business and technology focus and mutually applying key learning and best practices, enterprise maturity level required for true business performance management and continuous improvement can be achieved more efficiently and effectively. To do so properly, combination of concepts in architecture, business analysis, process modelling and implementation and maintenance is required, offering structural and integral alignment and flexibility in business and technology as enabler for business performance excellence. As business and technology domains progressively merge into business technology, time and effort of adequate responses to dynamic business contexts decrease and opportunities for alternative business models increase. This takes us back to where this chapter started: rather than as all-embracing „centre of the universe‟, BPM needs to be positioned as part of a „constellation‟ of collaborating domains creating maximum added value for enterprises, their partners and customers: “Together. Free your energies”! Literature [1] TechnoVision 2012 - Bringing Business Technology to Life, Capgemini , 2008 [2] The Strategy-focused Organisation, Kaplan, R.S. and Norton, D.P., 2001 [3] Aligning CobiT® 4.1, ITIL® V3 and ISO/IEC 27002 for Business Benefit - A Management Briefing, ITGI and OGC, 2008 [4] Worldwide Distributed Performance and Availability Management Software 2007-2011 Forecast Summary and 2006 Vendor Shares, IDC, 2007 28
  35. 35. | the way we see it [5] The five automation imperatives: a comprehensive look at Business Service Automation, HP, 2008 [6] www.Wikipedia.org [7] www.OASIS-org.com [8] several presentations on ARIS Value Engineering, IDS Scheer, 2008 [9] sdn.sap.com - several blogs on SAP NetWeaver BPM, SAP, 2008 Günther Drabbels is certified architect and Managing Consultant at Capgemini. Gernot Tomsits is Managing Consultant at Capgemini. 29
  36. 36. | the way we see it 2.5 BPM as crucial factor for outsourcing IT development 2.5.1 Introduction Outsourcing the development of IT systems has shown a huge growth over the past decade. Large companies, in many cases quoted on local and international stock exchanges, who were formerly developing their own IT systems, have chosen to outsource this discipline. Above all other arguments this choice has mostly been made because of cost savings. The business case for these companies was difficult to be negative as the costs of labour in e.g. India are a fraction of the costs compared to the wages in the western countries. After a significant number of years of experiencing IT being outsourced, it is a known fact that this change within the organisations also has an underestimated downside. This downside is the collaboration between the business parties on one side requesting certain IT support, and IT parties on the other side delivering the systems and changes that have been requested. Unfortunately delivered solutions in many cases are not recognised by the business and thus not to the client‟s satisfaction. In this article, this phenomenon is further elaborated. Solutions to highly improve this negative side of outsourcing IT will be investigated and given. The crucial value of BPM in this matter will be explained as also the trend of capturing high level business requirements in process models and the use of a reliable method for business analysis (BA). In the described situation, it is ironical that in most cases both business and IT parties have done the right thing to demand or deliver what is needed or has been requested. What is lacking in the communications between demand and supply in this environment is for both to have working knowledge of the same language: Business professionals do not speak „tech‟, they are not familiar with UML or use cases. They express their needs in words that describe the way the work needs to be done in the To-Be (Future State) situation. IT specialists then translate this business „language‟ into „tech‟ in a way that complies with the interest of their company. This translation by definition comes with interpretation, which gives room for misunderstandings resulting in a deviant solution compared to the expectation. The addition of business analysis to the development process has reduced many of the difficulties. Main task of the business analyst is to bridge the gap between business and IT by translating the business‟ demand into an understandable and workable package for IT developers. With their knowledge of information analysis, business process management and their expertise on specific subject matters, they form the ideal conversation partner for both business and IT parties. 30
  37. 37. | the way we see it Business parties benefit from business analysts as they can provide knowledge on the latest trends and developments in their markets. They understand their business processes and know how to improve them. IT parties also benefit because business analysts speak „tech‟ and are able to understand technological impact and even impossibilities of business requests and demands. On top of that, they are able to translate this into business language. Figure 1 shows the competencies of a business analyst. Although business analysts are very welcome professionals to the set, it has not completely solved the downside of IT outsourcing. So one could say that the problem is not „just‟ speaking different languages, there are also other aspects to it, such as  The relationship between business and IT has become distant;  The relationship has become formal instead of fraternal;  Former IT experts have become business analysts;  The relationship has changed due to cultural differences, which are compelling enough to be described in an article on its own and therefore not further addressed in this article. 2.5.2 Distant relationship When IT was still an in house operation, contacts between business and IT departments were intense and frequent, not to mention informal and pragmatic in order to realise the goals both parties were aiming for, being a team of colleagues. One would walk one floor down to discuss unclear topics or even organise a quick workshop to clarify potential misunderstandings. With IT being moved to, for example India, face to face contacts have been replaced by contacts via telephone or videoconferencing facilities, which take more time and effort to organise and which limit the visibility of non-verbal communications. Although this aspect of communications seems to be surmountable and low on impact, practice proves that the number of misinterpretations is off the charts. Thinking 31
  38. 38. | the way we see it about the well known fact that more than 90% of communications is non-verbal, this aspect deserves serious attention. Interesting conclusion from this aspect of the problem is that it indicates that the problem of difficult communications between business and IT is not new at all. Before IT was outsourced the problem was exactly the same, the difference however is that it now has become visible due to the new way of working. Parties nowadays are spread over the world and have lost the informal and pragmatic contacts they used to have, which were very important to keep the process rolling, making the inefficiencies which were already there, unnoticeable. So in order to improve the collaboration between business and IT, improving distant communications is another aspect that deserves particular attention. 2.5.3 Formal Relationship As both parties are no longer within the same company, interests have diversified. Even when both parties are within the same company but within different strategic business units, divisions or other entities, interests are usually in conflict with each other. Where the business “(just) wants things to work the way it supports their business process in the best possible way”, IT aims to reach highest efficiency at the lowest costs, by organising their assets, processes and services conformable to (e.g.) CMMi guidelines. And although CMMi is a very good standard to comply to, the challenge for IT developers is to ensure handovers from their clients (business parties) are smooth, meaning that they need to be able to fully and unambiguously understand the clients request before processing it. In the current situation, IT developers build solutions that meet the specified business requirements as defined by the client and almost nothing more. Although it sounds negative, this is actually correct considering the new relationship. As a result of a change in the process of realising business change, namely the outsourcing of IT development, the internal handover has evolved into a formal purchase order, which has a significantly different value. There is no room anymore for designing 20% of the solution on-the-fly like there was before, when the business kind of expected this from IT, to solve the loose ends that were not described. Today the delivery of a solution that does not comply with the demand, is to be adjusted at the developer‟s cost. This means that every initiative or interpretation from the developer that potentially contributes to a better solution, is a risk for the supplier if it was not formally agreed upon. This explains the developers‟ formal attitude. However, with the previous frequent informal contacts and activities missing, things are determined to go wrong. Hence additional information is needed to realise a common working language, enabling the provision of an unambiguous request to the IT developer. 2.5.4 From IT expert to business analyst In the process of outsourcing IT, many IT professionals lost their jobs. Some went to other companies while others were saved in order to avoid losing the 32
  39. 39. | the way we see it knowledge about the systems in use. For the IT professionals who stayed within the companies, in many occasions a place was found within the business analysis department. As business analysis is truly a different profession, this move can only be successful if these IT experts are trained in business analysis skills and more importantly, if these experts are able to adapt to the different mentality which is crucial to their new role and responsibility. Especially the latter is of great influence to the quality of the business analysis performance. The biggest difference between the IT professional and a business analyst is that the former gets an assignment and starts building the solution conforming to the received design. There may of course be some dialogue with the client, but basically IT professionals build to conform to the received design. A good business analyst however, receives a change request from a business owner, starts investigating the real business problem and determines whether the requested solution is the right and useful answer to the request. He does so by analysing and moreover understanding the As-Is situation and comparing the facts gathered from this analysis with the change drivers, client objectives and the change request. Based upon that analysis and agreement on that analysis with the client, he will design a To-Be solution that meets the change driver. A method that enables business analysts to perform their profession in an excellent way is the Structured 10 Expert Method for Business Analysis (SEMBA) , which is shown in Figure 2. This method will be addressed in more detail later in this article. 10 SEMBA is the Business Analysis Method developed by Capgemini 33
  40. 40. | the way we see it Quite a difference in approach one might say! So if former IT experts with their knowledge of the existing systems treat business requests using an IT driven approach, a greater risk will arise of requirements being written reasoned from the problem towards the IT solution, instead of reasoning from the desired process. This way of working will not, by definition, express the true needs of the business, but will be aimed at a solution which is known beforehand. Looking at this aspect in combination with the challenges created by the formalisation of the relationship with IT, one could say that it is tempting for a business analyst to write the requirements towards a known solution as it would save a lot of potential misunderstandings in the development process. 2.5.5 Virtual Workshops Summarising the three defined aspects that lead to inefficient collaboration of business and IT, the following list of desired improvements can be made:  improvement of distant communications;  extend the classical information package with additional information, to realise a common working language, enabling the provision of an unambiguous request to the IT developer;  make sure that in the process of business analysis a complete analysis is performed to avoid shortcuts to insufficient solutions. Currently Capgemini is experimenting with virtual workshops. This is a most promising way to improve distant communications. Virtual workshops are workshops where participants are not physically in one room, they can be spread over many locations around the globe. Through the use of web based tools an environment is created in which all participants can communicate through voice and writing. This way a collaborative working is realised leading to a much higher involvement and stronger commitment of distant resources. Besides currently available web-tools which enable conference audio, video and file sharing, much more sophisticated solutions are also being developed. For example SUN [1] has developed an environment in which a virtual office is created, where employees can walk around and interact with others in many ways; one can have both formal and informal meetings. Walking around in the virtual office, you can actually see others standing and talking at the coffee machine, you can build presentations, documents, drawings etc. together by sharing applications or you can demonstrate the results of your offline work, inviting others to provide instant feedback. You can even have a video conference where people in the virtual space are gathered in a conference room looking at a screen displaying people in the actual space. This kind of tooling enables distant IT developers be more immanent as they become actual part of the team in the same office, reinstating the short lines which were there before IT was outsourced and increasing the chances for a “right at the first time” deliverable. It is not only this new way of collaborating that will improve distant collaboration, but also the possibility to have IT development parties involved 34
  41. 41. | the way we see it earlier in the process. They will be able to perform the complete business analysis, instead of developing the solution alone based on the received requirements. 2.5.6 Business Processes are leading In case the IT developer is involved earlier in the project, it will be to be involved in writing requirements in a smart and unambiguous way, which is not easy at all. 11 The Integrated Requirements Management Approach (IRMA) aims to standardise the capturing and management of requirements in IT projects. Using this approach will lead to clear and complete requirements and ensures faster start up of the development project against lower costs. Also, the use of IRMA will provide additional information to the IT developer and will improve the requirements management discipline in the project, leading to better solutions. Perfecting requirements management is not enough. In order to reach unambiguousness, the developer needs to understand the arching context, the To- Be situation of which the requirements have been subtracted, in a more concrete and consistent way than described in the average vision document. Changes are based on problem statements, change drivers and client objectives. The arching context for the IT developer is provided by the business analyst by means of interdependent models, such as (a.o.) the business context model, business process model, governance model, information model, data model and high level application landscape design of both the current state and the future state. Parallel to developing these models, the business analyst elicits, documents, organises 12 and tracks changing business requirements in order to create a complete, coherent and consistent package. Naturally during this process of eliciting business requirements the encountered information and system requirements will also be captured. From all mentioned models especially the process model provides the concrete information fundamentally needed to interpret the business requirements the way they are intended by the business, namely the way they support the business process in the best possible way. This is because the process model pre- eminently describes the way of working once the change has been implemented. Consequently, it is the process model that is the common language for business and IT to speak in, in order to understand and to be understood. Therefore, business process modelling is crucial to successful IT development projects. The biggest added value of a business process model in this context is that it provides the business a language to explain what they really want. That is why business processes need to be leading in development projects as they are the 11 IRMA is the requirements management approach developed by Capgemini 12 Requirements Engineering within SEMBA is restricted to business and information requirements. SEMBA does not focus on the system requirements. 35

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