Applying a BPM Approach to Three Similar but Distinct Business Environments


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This session uses a case to explain the application of a reusable Business Process Management BPM approach to differing business environments. The BPM solution, which was created by CSC Consulting, has been and continues to be successfully applied to the lending processes at a major financial services company. The methodology has been applied to two divisions of the company — Commercial (middle market) and Private Client Services — in two parallel initiatives: Credit Process Redesign (CPR) and Lending Process Redesign (LPR). The same model is also currently being applied to a third group focusing on large, complex real estate loans. All three business environments are highly diverse, including multiple accounting and documentation systems and reporting tools, and numerous technical infrastructure systems. The presentation will describe how the reusable BPM process has been applied to develop differing business, technology, and implementation solutions. The speakers will also discuss how the methodology can be applied to new business models.

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Applying a BPM Approach to Three Similar but Distinct Business Environments

  1. 1. Applying a BPM Approach to Three Similar but Distinct Business Environments George Clark and Jamie Raut 2005 Technology and Business Solutions Conference June 9 – 11, 2005 Miami, Florida Copyright © 2005 Computer Sciences Corporation. All rights reserved. 11/5/2007 11:45:18 AM 1
  2. 2. Speaker Introductions • George N Clark Principal Consultant, Denver Delivery Services, Consulting Group Senior Business Process Specialist. 7+ years with CSC Consulting working in Project Management, Business Architecture, and Business Process roles. Actively involved in the Private Banking and Commercial Real Estate projects discussed in this presentation. • Jamie Raut Senior Consultant, San Francisco Delivery Services, Consulting Group Technical Designer. 5+ years with CSC Consulting and CSC Australia. Application Architect and Developer specializing in J2EE technologies. Actively involved in the Commercial Middle Market, Private Banking, and Commercial Real Estate projects discussed in this presentation. 11/5/2007 11:45:18 AM 2
  3. 3. Presentation Overview • Project background and review of last year’s presentation – A Practical Approach to Introducing BPM into the Enterprise • BPM Approach • Review of Approach as Applied to the Financial Services Industry – Commercial (Middle Market) – Private Banking – Commercial Real Estate • Lessons Learned • Questions 11/5/2007 11:45:18 AM 3
  4. 4. Case Study Background Client • Segment-leading Financial Services company • Industry leading performance by key business metrics • Predominant use of legacy, in-house developed technology solutions Account • Initial RFP for Wholesale Banking issued to 8 major IT, Strategy and niche players – Subsequent project for Private Banking and Commercial Real Estate Groups have started without going through an RFP process • CSC deployed a cross-practice team - IT, Process & Domain expertise • Projects have been business driven with joint CSC and client management • Technology and Business Teams tightly integrated 11/5/2007 11:45:18 AM 4
  5. 5. Last Year our team presented on the benefits of a BPM based approach to BPR 1. Business Led • Designed by process owners BPM • Processes designed in business terms Process Design • IT support to realize business vision B P M Conceptual Overview Tools Process Owner(s)/ User(s) 2. Flexible • Long-lived, complex processes Business Process Layer • Covers automated, human and hybrid Business Process High Level Logic/Rules activities A • Multiple processes on one BPMS BPMS • IT Architecture is process-driven Process B Orchestration 3. Agile • Near real-time process editing Connectors • Technology abstracted from business Middleware Data processes • Process as executable code Applications & Tools IT Infrastructure Business Process Management (BPM) is key to the next generation process transformation Business Process Management (BPM) is key to the next generation process transformation 11/5/2007 11:45:18 AM 5
  6. 6. A BPM based approach to BPR enables a very rapid parallel and iterative discover, design, develop and deploy cycle Vision 1. Discovery 8. Analyze Process Activities PROCESS 2. (Re)Design • Fast accurate visualization • Process elements captured as data – stored a process repository • Design can be analyzed, costed and quantified 3. Simulate 4. Deploy 5. Execute Technology T E C H N O L O G Y Activities Design • Processes can be simulated, automated and deployed on BPMS • Iterative, parallel Mo e nito nag development r Ma approach 6. Operate • Manage and control BUSINESS • Faster deployment executing processes than traditional waterfall 7. Optimize • Activity Monitoring for ongoing analysis and improvement Parallel/iterative BPM development achieves superior results in less time than traditional approaches Parallel/iterative BPM development achieves superior results in less time than traditional approaches 11/5/2007 11:45:18 AM 6
  7. 7. CSC’s BPM approach was customized to achieve client objectives • Key Client Objectives: – Constraints on growth due to process inefficiencies – Process inconsistency across lines of business and regions – Mismatch of customer/market expectations with capabilities • CSC Process Delivers: – Current State Assessment • 100+ interviews, BPM process maps incl. enablement, root-cause analysis – Future State Vision and Design (Process & IT) • Focused on cycle-time and effort reduction, flexible infrastructure – Gap Analysis & Implementation Roadmap • Process, Technology and Organization simultaneously – Business Requirements & Technology Architecture – Rapid Process-Centric Prototyping 11/5/2007 11:45:18 AM 7
  8. 8. The basic systems design uses a Service Oriented Architecture approach, driven by the business process 11/5/2007 11:45:18 AM 8
  9. 9. We have applied our approach to three distinct business environments all related to lending Commercial – Private Banking Commercial Middle Market Real Estate Commercial loans- Funding Mix of commercial and retail Relationship based real estate Product working capital, equipment lending, each with different lending, recourse and non- Types leasing, agricultural financing, product sets recourse commercial real estate, etc. Transaction Medium High Low Volume Transaction Medium High per Lender Low Transaction Size Medium Small Large Standardized with regional Standardized process in High level of exceptions and Process variations, with medium level of majority of transactions, with human intervention in the Standardization exceptions and human some exceptions and human majority of transactions. Need intervention intervention for ongoing collaboration. Origination system built on Origination system built on Existing Point solutions, excel outdated technology, various aging technology, various point spreadsheets, and enterprise Technology point solutions, and enterprise solutions, and enterprise accounting systems accounting systems accounting systems Other Active Development of internal portal PeopleSoft CRM and BEA No major technology projects in Technology application implementations ongoing active development that are specific to Real Estate lending Projects 11/5/2007 11:45:18 AM 9
  10. 10. Commercial – Middle Market • Existing Technologies and Ongoing Projects – Good traction on SOA (Service Oriented Architecture) – Shared customer data through web services • Process Standardization – Strong management support – Underlying resistance to change in line, but some willingness to change due to compliance / regulatory factors • Project Direction Decisions – TIBCO Staffware chosen as BPM tool – High level architecture is comprised of custom J2EE portal application, sitting on top of TIBCO, which in turn orchestrates the shared service layer – Presentation layer built on BEA WebLogic Portal 8.1 – Services layer built on webMethods Integration Platform 6.0.1 – Long-term (multi-year), large functional release chosen due to lack of existing systems to leverage, and decision to provide a large amount of functionality – Leveraged Portal application that was being developed at the same time – ProActivity used for current and future state modeling – Existing methodology in place, including UI standards 11/5/2007 11:45:18 AM 10
  11. 11. Private Banking • Existing Technologies and Ongoing Projects – Stand alone system for loan origination in place. Good example of a rushed prototype system that was prematurely deployed to production. – PeopleSoft CRM project and BEA projects in the initial stages of development • Process Standardization – Commitment from Senior Management to standardize processes, including: Approvals, Underwriting, Documentation and Booking – Some resistance to automating previously manual activities within the line. Realization that the standardized process had many exceptions. • Project Direction / Decisions – Large technology investments just prior to the BPM project. Due to budgetary concerns, determination made to not evaluate new software for BPM project. – Data-centric CRM project made a priority, with focus from senior management – ProActivity used for current and future state modeling – BEA WLI used for production build of lending processes – Small, manageable releases chosen based on the larger CRM/BPM roadmap 11/5/2007 11:45:18 AM 11
  12. 12. Commercial Real Estate • Existing Technologies and Ongoing Projects – Point solutions built on modern technologies, with ongoing minor enhancements – Desire to leverage the Commercial Middle Market solution described earlier • Process Standardization – Three distinct real estate lending groups have different cultures and perceive their processes as unique – Regional and office variations are common based on personal styles and market factors. Senior Management has expressed a desire to standardize processes. • Project Direction / Decisions – Project is currently in the Discover and Design phase – Senior management has indicated the desire to explore a rapid development process – Knowledge worker environment with a high level of exceptions and human intervention is impacting the analysis of what tools are appropriate • Applying Lessons Learned – Rapid prototyping will be used to drive out functional design, with the goal of leveraging the prototype into development – Solution Demonstration Lab (SDL) is being used to gain user buy-in and to create champions within the organizations 11/5/2007 11:45:18 AM 12
  13. 13. 3 Implementations of the Architecture Commercial Real Estate Commercial Middle Market Private Banking (Prototype) Presentation Process Execution/ Service Orchestration Service/ Data Access 11/5/2007 11:45:18 AM 13
  14. 14. Lessons Learned • Implementation of New BPM Technologies – IT Departments • Our projects were the first where the process wasn’t baked into the source code • There are some challenges in communicating the value of the BPM approach and tools • Existing development staff are focused on coding to specifications, not understanding the process – Existing Technology Base • Difficult to justify the cost of acquiring more appropriate tools if the organization already has licenses for a product that could be utilized • Every technology is a BPM technology these days 11/5/2007 11:45:18 AM 14
  15. 15. Lessons Learned (continued) • Nature of the Business Processes – Fundamental question of whether the process is well defined and repeatable, or mostly exception processes? – Influences on the tool selection • Tool strength may be in system-to-system, or human-to-human interactions • High transaction volumes and large user base emphasize scalability and standardization – Knowledge Worker – Human to Human • Knowledge worker environment creates the need for an iterative working environment that facilitates collaboration 11/5/2007 11:45:18 AM 15
  16. 16. Lessons Learned (continued) • Finance Industry Specific Factors – Content Management • The ability to re-use financial analysis requires the use of content management functionality – Business Intelligence / CRM • Industry emphasis on ‘know your customer’ can dictate a data centric approach – Compliance • Rapidly changing requirements are significantly impacting processes • Project Planning – Smaller releases preferred over large releases (90-120 days) – Preferable to avoid the temptation to model the universe of processes in the first release – Keep it simple, address the largest pain points in the first release (and not much else) 11/5/2007 11:45:18 AM 16
  17. 17. Current Delivery Team Composition Account Manager Industry Expert Ken Long Rosie Hartman Project Manager / Technical Architect Business Architect Jamie Raut George Clark Industry Expert Process Modeler Business Analyst Business Analyst Business Analyst Technical Analyst David Nash Neil Kakita Hunter Stair Amy Haase Jennifer Tian Renée Lum Support Team and Previous CSC Project Team Members • Elaine Anderson • Viraz Fouzdar • Robert Reti • Ajay Chaudhari • Keith Mattioli • Johan Schutz • Kerry Bardwil • Anil Joshi 11/5/2007 11:45:18 AM 17
  18. 18. Thank you. Questions? 11/5/2007 11:45:18 AM 18
  19. 19. Business Process Modeling/Analysis Tool: ProActivity • Flagship product from ProActivity Inc. chosen as BPA tool • Primarily a modeling tool • Add-ons available for BAM • Process exportable to BEA WLI, Fuego, Oracle • Captured “as is” and “to be” state using the tool • Existing roles and systems assigned to process steps in “as is” model • Designed roles, systems and services assigned to process steps in “to be” model 11/5/2007 11:45:18 AM 19