BPM Trend Series: Aligning BPM and BI

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A closed loop approach leads to better-informed decisions and enables Intelligent Business Operations

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BPM Trend Series: Aligning BPM and BI

  1. 1. BPM the way we see it Aligning Business Process Management and Business Intelligence to Achieve Business Process Excellence A closed loop approach leads to better-informed decisions and enables Intelligent Business Operations Today’s economic climate means performance management, where businesses need to be as effective metrics are compared with business and efficient as possible, and objectives and the results fed back to make the smartest possible to improve processes and decisions. decisions. The way to achieve Client experience confirms that this is by integrating Business BI and BPM are far more powerful Intelligence (BI) and Business when integrated together thanBPM Trends Series Process Management (BPM) – a individually.This paper is one of a series, Capgemini combination that is a prerequisiteBPM Trends, which shares insights into of Intelligent Business Operations.how to resolve today’s most pressing BPM on its own is not enoughbusiness challenges using the latest because you can’t see the dynamicBusiness Process Management tools and context of processes. By addingmethodologies. BI you can achieve closed loop
  2. 2. Gaining competitive advantage get is just a giveaway that comes through better processes and with your product, shortages can decisions undermine your whole proposition. Given the economic and institutional „„By definition, agility can necessitate crises in our globalized economy, some inefficiencies. You need more the way to compete is to run your than minimal stock levels to keep business with maximum efficiency a manufacturing conveyor belt and effectiveness, and to make the running; similarly, economic growth smartest possible decisions. arguably requires some level of frictional unemployment. To do so, you need what has been „„A call center representative may called “the integrated business be confronted with a demanding processes and capabilities that customer, and be forced to decide together serve customers in ways that whether to prioritize overall are differentiated from competitors efficiency or service to this one and that create the organization’s customer. Does the agent mark formula for business success”1. the customer as a lead, get off the phone, and move on to the Capgemini believes that can best be next customer, or continue the achieved through the alignment of conversation with this customer Business Process Management (BPM) and let others wait? An optimized and Business Intelligence (BI). This process won’t help the agent decide, combination is often referred to as unless the process also provides Operational Intelligence, and is an information about the individual essential component of Gartner’s customer’s value to the business. concept of Intelligent Business Drill-out Operations (IBO)2. All these cases show the importance of looking at processes in their Drill-down is usually based on just The limits of BPM wider context, and seeing how the one dimension, or on something like BPM on its own will deliver changing dynamics of this context a KPI tree. For example, you can efficiency, agility and customer affect customer experience or business drill down through sales by region, value. intimacy. But is it the right kind by margin, by salesperson. Drill-out is something completely new, and is of efficiency? Does the balance between efficiency and agility Combining BPM and BI based on a different representation of the business, such as a process model, meet business needs? Is the level The dynamics of the context can be resource model, or value chain. With of intimacy appropriate for every understood by complementing BPM it, you can jump from one dimension customer? with the analytic mechanisms of BI. to a completely different one. Equally, to harvest the full potential Let’s look at some examples: value of BI you need a business model Let’s say sales of a low-margin „„A customer delivery process can and a business process perspective. standardized product are lower be very efficient (for example, Only by using BPM and BI together in one region than in another. following a Lean program) – in fact, do you get access to sophisticated Drilling down might not tell you the capabilities like the one Capgemini it may not contain any idle time reason, but drilling out could. For at all. But efficiency is not always calls “drill-out” (see panel). example, exploring the sales figures in conjunction with the business matched with effectiveness. For model might reveal that processes example, it may be that because However, simply integrating BPM, are different in the lower-performing of marketing campaigns in some BI and some business applications region: perhaps greater customization regions, there are configuration into a customer initiative will of products is lengthening delivery problems and stock breakdowns. not yield the desired competitive times because of the switchover time Even if the item that you can’t advantage. What is required is needed to make the standard product. 1 Thomas H. Davenport, Jeanne G. Harris, Competing on Analytics, (Harvard Business School Press, 2007), p. 187 2 Gartner Says Intelligent Business Operations Is the Next Step for BPM Programs, press release, March 7, 2012. http://www.gartner.com/it/page.jsp?id=19435142
  3. 3. BPM the way we see itstructured interoperability across the e-mails, or experience to determineorganization’s entire BPM, BI and the best decision in the currentapplication environments. context. In situations with a wide andThis interoperability must be changing variety of options, this lackbusiness-driven, which means that the of support for decision-making leadsinitiative needs to start from a broader to disastrous inconsistency.context than the processes themselves:that of the business architecture, Adding BI analytics into the processbusiness model, and value chain. improves and accelerates decisions, enabling better outcomes (Figure 1).The alignment of BPM and BI can beseen from two main perspectives: Business rules are often used to„„Injecting BI into business processes inject BI into BPM and hence provide to improve decision-making – i.e. decision support. This is a valid taking an inside-out view of the of approach that makes processes more the decision flexible, offers additional analytic„„Closed loop performance capabilities, and hides much of the management – i.e. taking an complexity that is typical of BI. outside-in view of the decision Defining the rules is a complexWe will discuss each of these process that involves balancingperspectives separately, but it should conflicting priorities in different partsbe understood that they are two ways of an organization. Rules enginesof looking at the same issue: that of can help by providing scalability,linking the process information and traceability, and accuracy.process results available through BPMwith the decision support capabilities However, rules engines alone areof BI. not enough. They cannot cope with the typical scenario of proliferatingInjecting BI into business processes business models, products, services,to improve decision-making channels, customer segments, andMany business processes require users value expectations from differentto make a decision, such as approval stakeholders. Nor do they provide theof a purchase request. Often, the vital ability to understand changingdecision has not been modeled as environments and respond to thatpart of the process, leaving the user understanding.to rely on spreadsheets, phone calls,Figure 1. Analytics that feed into business processes – contact vendor activity lytics Ana Policies and procedures (control) Request for quotation (output) Analytics Contacting a vendor Approved purchase request (input) Applications Resources Source: Capgemini 3
  4. 4. For example, by implementing Other examples where BI can usefully rules, you could make an airport’s be injected into BPM include: operations efficient from a perspective „„choosing the best shipping vendors of ground and air traffic control. But for a shipping firm your rules probably wouldn’t take „„ defining skill requirements to into account the most valuable aspect perform a task of the operations from an airport perspective – that is, the shopping „„ allocating field service teams to area. (Heathrow Terminal 5 has been interventions described as “a huge shopping mall „„ employee appraisal with a parking lot for airplanes”.) „„ approving website content „„ choosing which marketing Add BI, and you could get more campaigns to fund accurate intelligence on where the plane is, and on how long it will take to refuel, complete maintenance etc. Closed loop performance That way, passengers can be given management more time to shop before being asked Most BPM initiatives capture metrics to go to the departure gate. Then to assess the efficiency of a process. there should be more revenue for A few initiatives have shown, retail outlets and less frustration for though, that more can be done customers, since they no longer have by setting process metrics in the to wait idly by the gate for the aircraft broader context of a value chain or to become available. a business model. It then becomes possible to understand the impact By combining BI with the rule- of a given process on the overall based approach associated with performance of the business: either BPM, you can monitor the on its overall strategic objectives or decision-making process from an a specific business campaign. That analytical perspective. Errors in understanding can lead to better business rules will be detected decision-making at an organizational sooner, and rules can be changed level (Figure 2). as necessary, either automatically or manually. The results of performance monitoring become even more valuable if they Figure 2. Analytics about business processes – procurement process ytics Anal Policies and procedures (control) Approved invoice (output) Produktie TV Ter plaatse opgenomen Type? Uitzendklaar item TV Team ter plaatse Vervoer en Vervoer en opstellen inpakken materiaal materiaal Analytics Journalist Visioneren Montageteam Selectie maken Doorstralen Opnameteam Opname maken Grafische afwerking In-en uitleiding Purchase request (input) Applications Resources Source: Capgemini4
  5. 5. BPM the way we see itare used to adjust business processes Conclusion dimensions. As a result, managementand objectives. This closed loop Today, many organizations are and staff can make better and moreperformance management often implementing Business Process timely decisions and the organizationinvolves human intervention to Management and Business Intelligence becomes more efficient and effective.improve the way decisions are made initiatives as separate programs. They This is a crucial step for any– for example, the call center agent are flooded with indicators – mostly enterprise with its sights set onmight be instructed to look at a process performance indicators and Intelligent Business Operations.metric of the customer’s value to the key performance indicators – butcompany before deciding how long performance monitoring is carriedto spend on the call. The feedback out at too local a level, in too isolatedand insights gained may also lead a way, and with too much focusthe business to automate business on lagging indicators. Usually it isprocesses and event handling further. hard to see how the various factors measured contribute to differentFrom a technology point of aspects of business value.view, closed loop performancemanagement solutions require at least Combining BPM and BI to achievea combination of BPM and BI, and closed loop performance managementsometimes Complex Event Processing makes it possible to relate all thesetechnology as well. indicators to one another. It then becomes possible to analyze cause- and-effect relationships over different Client case study: bank adds BI to a BPM-powered solution Management issue supported by a new Business Process There was a wide gap between the „„ The COO of a large international Competency Centre (BPCC), was documented process models and bank’s retail arm set up a business launched to improve operational what teams actually did campaign to define guaranteed business processes. service levels for customer Capgemini’s solution categories showing a low Net This initiative resulted in leaner In four months, we helped the Promoter Score (i.e. the customers operations and well-documented bank to introduce BI analytics were less likely than average to processes, but essential elements were based on a business model and a promote the bank to relatives and still missing. For example: value management methodology. friends). The service guarantee „„The impact of the change on Our approach made it possible stated that if the bank failed to business results or business value to explore process performance handle customer transactions was not clear information along with intelligence within specified time limits, 0.05% „„There was a lack of information on customers, channels, operational would be added to the customer’s to support senior management savings accounts. decisions, and the impact of those decisions on operational execution BI about business operations was hard to establish Now I really have a was essential to keep service „„There was not enough information grip on what is going level breaches to a minimum, about current processes for the on in my organization; particularly as the bank wanted to COO to know whether a proposed launch multiple campaigns of this action, such as this campaign, was this will be the ‘Single type. viable in a particular region Point of Truth’ for the „„Performance at each level of the whole bank. Initial approach management hierarchy (COO, value COO of retail bank A good deal of relevant chain owner, process owner, team transactional and process owner) was measured, but it was information was already available, not possible to see how one level and a large BPM project, impacted another 5
  6. 6. teams, and financial objectives work together to achieve corporate Next steps and risks. We also introduced a objectives The bank now intends to apply feature called “action management”, „„A range of information to support the same Operational Intelligence which provides flexible tracking of business campaigns is now available approach to other value chains performance improvements across a – it is easy to assess whether they (savings, mortgages, payments, range of initiatives. are viable, and then measure their and cards), other business units impact (corporate banking, private banking) Results „„Through appropriate use of and banking operations in other „„All management levels, from COO performance feedback, the bank has countries. There will also be to operational team leaders, now closed the loop between initiating continuous improvement of the area have performance information actions, monitoring performance described below. about processes, customers, and taking new actions finance and capabilities to support „„The bank regards this project as their decisions the first time it has achieved true „„The impact of performance at one Operational Intelligence level on another level can be seen, and there is a daily “performance dialogue” between all hierarchical levels. This makes it possible to Figure 3. Process manager cockpit Source: Capgemini, based on cooperation with VisionWaves®, ©2012 VisionWaves B.V. All rights reserved6
  7. 7. BPM the way we see it ­­ About Capgemini ® With more than 120,000 working, the Collaborative Business people in 40 countries, ExperienceTM, and draws on Capgemini is one of the world’s foremost Rightshore®, its worldwide delivery providers of consulting, technology and model. outsourcing services. The Group reported 2011 global revenues of EUR 9.7 billion. Together with its clients, Capgemini creates and delivers business Learn more about us at and technology solutions that fit their www.capgemini.com needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of Rightshore® is a trademark belonging to CapgeminiThis article has been written jointly by Marc Kerremans and Nicholas Kitson.Marc Kerremans works as an independent market analyst and managementconsultant in different industries covering areas such as Business ProcessManagement (BPM), Performance Management, Organizational Transformationand Strategic Orientation. Follow Marc on Twitter.Nicholas Kitson is Head of BPM of Capgemini’s Financial Services GlobalBusiness Unit. He helps organizations to achieve competitive advantage andbest-in-class performance through process improvements, including innovativetechnology for BPM and business rules. Discuss BPM with Nicholas via ExpertConnect. Find out more about our approach to Business Process Management and about the BPM Trends Series visit: www.capgemini.com/bpm www.capgemini.com/bpm-trends or email: BPM@capgemini.com Copyright© 2012. All rights reserved by Capgemini.
  8. 8. www.capgemini.com

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