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.

1. IBM Smarter Process
1
Robert Golladay, Smarter Process Leader, Europe
golladay@uk.ibm.com
28 Nov, Stockholm

2. Managing complexity is a 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 are disrupting how companies do business
spend by
2014
25%
productivity
improvement
47%
growth in cloud
processes
€100B
government
savings
CONSEQUENCES
$3.6B

4. New forces are disrupting 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 for Smarter 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

7. 7

8. Here are several recent 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

9. 4 Key Capabilities
9

10. Typical Entry Points demanded 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 management yields 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 management yields 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 and implied 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 touch claims 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 of existing 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
These Decisioning 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 for Smarter 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

20. Grazie
Italian
Traditional Chinese
Thai
Gracias
Spanish
Merci
French
Russian
Arabic
Obrigado
Danke
Brazilian Portuguese
German
Simplified Chinese
Japanese
20
Korean

21. Streamlining Compliance Processes
These Decisioning 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 be done 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 for Smarter 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

24. Grazie
Italian
Traditional Chinese
Thai
Gracias
Spanish
Merci
French
Russian
Arabic
Obrigado
Danke
Brazilian Portuguese
German
Simplified Chinese
Japanese
24
Korean