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BPM: not just for the big kids on the block

This article appears in the issue January 2004 [Volume 13, Issue 1]


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By Judith Lamont

Business process management (BPM) solutions are most often associated with large enterprises having complex business procedures. Indeed, such companies have been successful in using BPM to reduce cycle time and improve consistency in their processes. However, small to midsize companies also can benefit from automating their business processes. As BPM products become easier to deploy and use, smaller companies with limited IT resources are finding attractive opportunities for improving efficiency. Pricing models that consider the number of users, developers, processes and CPUs can make the products affordable. Although such companies typically tackle smaller projects with simpler processes, benefits can be just as significant. And like their larger counterparts, small to midsize companies are likely to start with one process and quickly expand to others.

With just 100 employees, iUniverse may be one of the smallest companies ever to automate its business processes. Established in 1997 to serve individuals who wish to publish and market their books, iUniverse had developed in-house systems to support its business activities, which include production tracking, marketing and distribution of its publications. Each process component had embedded logic that sent a message to activate the next component. However, because the process control was coded into each application, it could not easily be changed. iUniverse wanted a method of managing its business processes that could grow and change with the company, while retaining the value of its previous IT investments.

iUniverse selected Intalio|n3, a business process management system from Intalio, and began migrating the process by which it sends catalog information to various distribution channels. Information about the books and the distribution channels is extracted from an Oracle database. The catalog information is then formatted according to the channel's requirements (e.g., XML, spreadsheet) and sent to the channel partner. That process was chosen as the first because it is relatively simple and occurs on a scheduled basis. After it was successfully completed, iUniverse moved additional processes to the system, including print confirmation and tracking the availability of titles.

"We are now migrating one of our primary back-end production processes to Intalio|n3," says Vernon Stinebaker, iUniverse VP. "We envision that ultimately, all of our business processes will be managed by the system." Because the iUniverse staff is acclimated to technology, cultural issues have been minimal among users. However, the development team had to shift from viewing applications as large, monolithic entities to a more service-based architecture of reusable components. The success of the new BMP system is measured, according to Stinebaker, in reduced development time of 50% or more for new processes and in the ability to perform actions that would have been impossible with the previous system.

Intalio|n3 is not aimed at small companies, but has some features that make it attractive for them. Page Designer, for example, lets developers build interactive user interfaces or forms from a library of drag-and-drop tools. The software provides a development environment that fosters collaboration between IT and business professionals. Once the system is developed, business users can make process changes directly.

"Requiring programming knowledge to build an application defeats the purpose of putting power in the hands of business users," says Ismael Ghalimi, co-founder and chief strategy officer of Intalio. "Small companies in particular can have a difficult time finding J2EE gurus."

Intalio was the founder of the Business Process Management Initiative, whose goal is to establish standards for BPM. BPMI.org defines open specifications to enable standards-based management of business processes.

"Over time, BPM technology may become parallel to that of databases," says Nathaniel Palmer, VP and chief analyst of Delphi Group, "which will help smaller companies by simplifying their programming requirements." The development of SQL-based standards paved the way for the management of business data using off-the-shelf products. If the same evolution occurs for business processes, more emphasis could be put on orchestrating the processes, and less on the mechanics of making them work.

Accepting change

Tetra Holdings, a company that manufactures aquatic products, wanted to improve the flow of engineering change notifications (ECNs) within the company. ECNs are required in order to change any aspect of a product, from its dimensions to its labeling. The change notifications are routed through as many as 40 individuals in six different departments. In order to streamline that process and shorten the engineering cycle, Tetra selected e-Work from Metastorm (metastorm.com).

To ease the impact of the new system, all 200 U.S. employees in the company were initially trained on a simpler process that was introduced before the ECN system, a vacation change request. That process potentially affected all employees, and used all the e-Work features that were going to be used in the ECN process.

"Even people who are not power users were comfortable with it," says Charlie Lisanti, IS consultant. "Then we rolled out the ECN module, and we have had no resistance to e-Work at all."

After implementing e-Work, the ECN request process was reduced from an average of five or more days down to one day. Users can see all of the related folders and documents through e-Work, as well as what stage the request has reached.

"Employees like the feeling of control," adds Lisanti. "They can see where the request has been and who has approved it."

Tetra plans to continue rolling out applications, and has already introduced a lab test request and approval process in e-Work. The process was selected as a high priority because requests were being submitted in a variety of formats and channels, including e-mail and hard copy, with inconsistent information. The request is standardized, so it contains all the necessary information, and tracking is now automated. Automation of the billing instructions process is another high priority, to standardize the forms and procedures for changing customer information and pricing. Over time, Tetra plans to integrate the automation of its U.S.-based activities with those in its German facility, which makes the Tetra brand fish food.

Consistency and efficiency in business processes are goals for both large and small companies. However, smaller businesses may also use BPM products in a manner that is quite different from the way they are used in large businesses, according to Metastorm's CEO, Bob Farrell.

"Small businesses get much of their competitive advantage from flexibility," Farrell points out, "and BPM is inherently designed for real-time enterprises." Rather than focusing on getting a complex process well-defined and enforceable, which might be the approach of a large company, smaller businesses can use the BPM tool to capture a new process and reuse it.

Approving drivers

Cardinal Logistics Management is an integrated transportation and logistics company that provides contracted trucking and local delivery services. To meet those demands, the company recruits, screens and qualifies a large number of truck drivers. Each of the 90 field offices around the country must be prepared to respond quickly to customer needs. Cardinal's strategic plan is to grow the company significantly while making best use of its overhead structure. Cardinal has about 500 employees and 1,200 drivers, some of whom are employees and others, contracted drivers.

To better manage the handoffs between the field offices and the corporate office in North Carolina, Cardinal implemented iApprove from Integrify (formerly Buoy5), a software solution that automates the request and approval process. One process that has now been automated at Cardinal is the new driver verification procedure. When a driver submits an application at a field office, it is immediately scanned, and key information is entered into iApprove online. The application is sent to half a dozen people who conduct a careful check of the driver's history, including driving records and a criminal check. The workflow through the corporate office is all managed online. At the end of the process, data for approved drivers goes directly into the payroll system.

"We found that deploying iApprove was no more difficult than any of our other software products," says Jonathan Turner, MIS director at Cardinal. Turner believes that the ease of use and lower costs of BPM software are making it more attractive to smaller companies. "Eventually, we would like to have program administrators who are not technical but have the business experience to map and modify our processes," he adds.

The iApprove system is still being implemented, but already Turner can see additional potential. "The software provides a window into the corporate office so that we will be able to see where requests are at any stage," he observes. Other processes planned to be included in iApprove are employee requests such as business cards and change of status requests. The flexibility of the system allows nearly any process to be automated with very little additional development or implementation cost.

"Most of our customers are in companies of 500 to 2,000 employees," says David Willsey, CEO of Buoy5. "We designed iApprove to be an out-of-box solution rather than a platform that would require a lot of customization." Buoy5 targeted the small to midsize market, Willsey says, because it is underserved. However, iApprove scales to large groups and can be used across departments; for example, it has 40,000 users at GlaxoSmithKline.

Even large companies can have difficulty implementing BPM solutions, according to Ken Vollmer, a Giga Research director at Forrester Research. "You need technically savvy people in IT," Vollmer cautions, "along with the will of the organization to change." Also, although defining the processes may often be done without programming, the integration steps can pose particular difficulties for companies with limited IT resources. However, for motivated midsize companies with processes that are relatively straightforward, BPM offers the same appeal that it does for large companies—efficiency, speed and cost savings.

BPM software leverages credit union staff

The School Employees Credit Union of Washington (SECUWA) is a small organization serving a large member base. With 100 employees in its two branches, SECUWA serves over 75,000 members throughout the state. The 45 financial management representatives at SECUWA provide members with "once-and-done" service, which means they all handle the processing of Visa credit card applications.

The Visa applications arrive from a variety of sources, including the SECUWA Web site, faxes and phone calls. Processing was being done manually, with duplicated data entry, e-mail communication and no tracking capability. To improve customer service and increase staff efficiency, SECUWA wanted to automate the process and is implementing BizFlow from HandySoft (handysoft.com) to route and track the applications. When the system becomes fully operational by the end of January 2004, SECUWA expects to reduce processing time from 48 hours to just 30 minutes. The credit union is also evaluating BizFlow for use in other activities, such as loan processing and employee expense reports.

Easy integration is the goal

Sometimes a company picks a BPM product that is a good match for its functional requirements but then discovers that the integration side is more challenging than expected. Smaller companies may be hard pressed to produce the IT resources needed to deploy a BPM system. AptSoft has recently introduced AptSoft Director, which allows users to assemble processes employing a browser and pull-down menus. Mapping to data is done dynamically at runtime. That built-in integration layer simplifies integration of the BPM solution with other applications.

"Our product relies on an object model," says David Cameron, VP of marketing and product integration at AptSoft. "Rules, touch points and processes are all reusable components." Cameron notes that in practice, the enterprise market and mid-market converge, because even large companies are using BPM in a tactical way to solve specific problems. The scope of the project, more than the size of the company, determines the technical requirements.


Judith Lamont is a research analyst with Zentek Corp., e-mail jlamont@sprintmail.com.


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