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IBM Smarter Process (Stockholm)
The document discusses how IBM helps clients implement smarter processes through business process management (BPM) and operational decision management. It provides examples of how automating processes and decision logic can significantly improve outcomes like reducing claims processing time from weeks to hours and increasing straight-through processing from 22% to 96%. The document also outlines IBM's capabilities in BPM and decision management software and services and how clients can start with small projects and build toward enterprise-wide transformation.
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IBM Smarter Process (Stockholm)
- 1. IBM Smarter Process 1 RobertGolladay, Smarter Process Leader, Europe golladay@uk.ibm.com 28 Nov, Stockholm
- 2. Managing complexity isa challenge in most industries Time spent managing complexity (customer variability, performance quality and workflow efficiency) in service-centric industries has surpassed 50 percent Complexity threatens to reduce customer engagement 2 Source: Booz and Co., 2011
- 3. New forces aredisrupting how companies do business spend by 2014 25% productivity improvement 47% growth in cloud processes €100B government savings CONSEQUENCES $3.6B
- 4. New forces aredisrupting how companies do business $3.6B Mobile requires process reinvention spend by 2014 Forrester forecasts that companies will spend about $900 million on mobile process reinvention services in 2013 and up to $2.7 billion in 2014 25% Socially-enabled processes drive increased productivity productivity improvement According to McKinsey, social technologies, when used within and across enterprises, can raise productivity of high-skill knowledge workers by 20 to 25% 47% Cloud deployments force companies to rethink their processes growth in cloud processes €100B government savings Gartner ranks Business Process as a Service (BPaaS) as the fastest growing cloud segment with 47% annual growth Big data drives insight into processes McKinsey found government administration could save more than €100 billion in operational efficiency improvements alone by using big data
- 5. IBM capabilities forSmarter Process Banking Insurance Healthcare Industry and Functional Industry and Functional Consulting Expertise Consulting Expertise Government Operational Decision Management Telecom Managed Managed Business Processes Business Processes Social Mobile Transport Energy Industry Solutions Industry Solutions and Accelerators and Accelerators Big Data Cloud Business Process Management Retail Case Management Operational Intelligence Operational Intelligence Business Intelligence Predictive Analytics Enterprise Content Management Service Oriented Architecture & Integration 5 Master Data Management
- 6. Adoption is Incremental,Benefits can be Extraordinary Europe Tamed incident management scenario in record time Implemented twenty processes across their supply chain in 24 months System handles 30,000 rules and 500 transaction types for 4,000 institutions 3x faster time-to-market 25% cost reduction to maintain business logic Increases customer & distributor satisfaction Company-wide adoption by business users > 200 simple processes built by business users in production within 18 months > 40,000 tasks assigned to users per month within first 6 months > 180,000 process instances created in first half of 2012, surpassing total for 2011 Average 3000 users per day 6 Cut “engineering” time of designers on car systems by 20% in one year 60+ BPM Developers across 3 continents Multiple processes automated across purchasing, & product development Process discovery, process automation and integration, and decision management are all building blocks across the enterprise
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- 8. Here are severalrecent examples of BPM/BMRS deployments delivering Smarter, more agile processes @ IBM Mid-Market Deal Registration – Deliver PTI improvement by reducing deal registration cycle time with rules-based work-flow automation. Supply Chain Alerts – Over $2M annual savings for timely notifications when supply chain disruptions occur. Cross-brand Pricing Estimator – Reduce pricing proposal implementation from 14 to 1-4 days and deployment to new countries in days versus weeks. Business Outcomes Achieved GTS Cloud Sales Enablement – Integrated work-flow, rules and monitoring to reduce partner “register to welcome kit” cycle-time from days to hours. GMU Geography Location Code Assignment - Enabled GMU reps to update rules (direct) for geography location code assignments, reducing cycle time from several weeks to just a week for more than 50 countries. Maintenance Technical Services – Increased IBM Client satisfaction through proactive notification of exposures in clients’ IT inventory by applying rules derived via analytics Infrastructure Optimization – Reduced cycle time by 75% to complete the analysis required to migrate from Physical servers to Virtual servers Business Agility Enablement Cloud - Application teams rapidly acquire shared instances of BPM and Decision Management software in minutes to implement solutions that achieve business agility. 8
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- 10. Typical Entry Pointsdemanded by clients to achieve Process Innovation Industry Expertise and Solutions Business Discovery Understanding & Compliance Process Automation & Integration Decision Management Business Events & Rules Business Visibility, Monitoring & Measurement Master Data Management Integration Analytics Enterprise Content Management
- 11. Business process managementyields significant benefits 4 Weeks 300% ROI KPMG is providing its clients with business benefit in as little as two weeks, helping them remediate bad books of business Captured critical tax&audit knowledge, applying ad-hoc business patterns and creating a new line of business Horizon Blue Cross Blue Shield generated an average of 300% ROI on each internal process improvement project Reduced processing time for claims by 20-30 minutes each 3000 Banco Espirito Santo has 200 simple processes in production with 80,000 process instances in 6 months Average users per day 3000 average users per day running on the processes $30 Million in savings in six months 11 Caterpillar generated $30M automating workflow and decision making in the warranty claim process Visibility, compliance, and adaptability to new international markets
- 12. Operational decision managementyields significant benefits 130 MasterCard processes each payment transaction within 130 milliseconds per request milliseconds per transaction 43,000 transactions per minute; Responds to fraud threats within hours 8000 Visa Europe handles up to 8000 credit card payment authorizations per second across Europe transactions per second 96% 60 rule changes in 13 months; Over 30,000 business rules Swiss Customs achieves 96.5% straight-through processing to validate electronic customs declarations straight-through processing 200,000 declarations daily; Over 700 business rules 300% WorkSafe Victoria sees 300% improvement in payment times to workers compensation treatment providers improvement 12 85% straight-through processing; Over 2,000 complex rules
- 13. Costs, risks andimplied value of Warranty Management in the Automotive Industry Warranty Costs are an important cost factor for the automotive industry. US statistics show (2011) efforts of > 9 bil. USD on the OEM and 1,6 bil. USD on the supplier side. For these costs companies need to hold high reserves. Claims paid (US Automotive Industry) Reserves held (US Automotive Industry) IBM & customer confidential
- 14. Warranty Claims Processing- Before Less Automated, Less Precise/Flexible Notify www N Assess Eligibility Call Center Reseller 78% Eligible? Y N Eligible? Manual Assessment Y Assess Paymen t Settle Decision logic embedded in procedural progamming logic; database/stored procedures; domain experts Limited straightthrough processing Lack of consistency, granularity and specialization Claims leakage/fraud 14 14
- 15. Situation • High touchclaims process – 1.7M claims per year, $1B payouts – 22% of all claims (in $) are automatically evaluated & settled • Only 8% for claims above $2500, yet representing 40% of total payouts • Inconsistencies – Claims processed & settled by people executing corporate policies and exercising their judgment – Lack of auditability • Inability to change & adapt 15 15 – No clear view of policies in effect at any specific period of time. – Difficult to understand and change business policies, thus limiting the business tactics and strategy – Lacking ability to quickly adjust and adapt to the changing business environment – No trend analysis or easy tie-back to product management, engineering, production
- 16. Approach Incremental refinement ofexisting guidelines • Create new guidelines to automatically settle 100% of claims lower than $800. (38% of the total warranty claims transaction) • Refine existing guidelines for the current automatic processed claims: more consistency & minimized claims payouts to the extent possible (38% of the total warranty claims transaction) Expansion of automated settlement with new guidelines • New guidelines (greater complexity) for higher value claims, which account for 65% of the total claims dollars paid out (24% of the total current warranty claims transaction) • Decision logic to engage an expert when a creative human decision is required 16 16
- 17. Warranty Claims Processing- After Less Automated, Less Precise/Flexible Notify www N Assess Eligibility Call Center 78% Eligible? Y N Limited straightthrough processing Eligible? Manual Assessment Y Assess Paymen t Reseller Settle More Automated, More Precise/Flexible Notify www N Assess Eligibility Call Center Reseller 17 17 0-18% Eligible? Y Decision logic externalized Context-specific consistent and granular throughout Y Assess Paymen t Lack of personalization and specialization Highly automated N Eligible? Manual Assessment Decision logic embedded in the process model or code Settle
- 18. Streamlining Compliance Processes TheseDecisioning Elements Or Decision Intensive Applications are Business Rules rich Examples: If the warranty claim is for 400 horsepower turbo diesel and the mileage is less than 150k miles and failure codes d and e apply Then approve warranty claim If mileage is less than 150k miles and failure code a, b, and c apply Then manually review warranty claim 18 Copyright © 2008 by ILOG, Inc. - All Rights Reserved 18
- 19. Why IBM forSmarter Process? Install base of over 5,000+ active implemented customers and 800+ business partners Leader in Gartner’s Magic Quadrant for Intelligent Business Process Management Suites and leader in the Forrester Waves for BPM Suites and Dynamic Case Management #1 market share in Business Process Management (BPM) and Business Rule Management Systems (BRMS) according to Gartner and IDC Global Business Services and ISSW established the Smarter Process Center of Competency (CoC) to provide deep expertise and create repeatable Smarter Process assets 19
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- 21. Streamlining Compliance Processes TheseDecisioning Elements Or Decision Intensive Applications are Business Rules rich Examples: If the warranty claim is for 400 horsepower turbo diesel and the mileage is less than 150k miles and failure codes d and e apply Then approve warranty claim If mileage is less than 150k miles and failure code a, b, and c apply Then manually review warranty claim 21 Copyright © 2008 by ILOG, Inc. - All Rights Reserved 21
- 22. Adoption can bedone incrementally Think Big. Start small. Grow Fast. Think Big. Start small. Grow Fast. 2 1 3 Transform Across and Beyond the Enterprise Establish a Program Build Project-Based Credibility Project …….. to Program ….... to Transformation 22 22
- 23. Why IBM forSmarter Process? Install base of over 5,000+ active implemented customers and 800+ business partners Leader in Gartner’s Magic Quadrant for Intelligent Business Process Management Suites and leader in the Forrester Waves for BPM Suites and Dynamic Case Management #1 market share in Business Process Management (BPM) and Business Rule Management Systems (BRMS) according to Gartner and IDC Global Business Services and ISSW established the Smarter Process Center of Competency (CoC) to provide deep expertise and create repeatable Smarter Process assets 23
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