Practical Applications Yield Fast ROI
After an era of engaging in long, expensive and ineffective efforts at business process re-engineering (BPR), organizations everywhere abandoned BPR in favor of packaged applications that could automate business processes. Organizations hurried to implement CRM, ERP, SCM and homegrown systems that would “fix” broken processes and make them more efficient. And they did—sort of. There were definite cost savings and service improvements, but as time lapsed, organizations realized that it was difficult to change the processes that were now entrenched in a myriad of disparate software systems. Not to mention the fact that packaged applications tend to generalize processes, so that as more and more organizations adopted them, they became less and less valuable in terms of achieving competitive advantage. In addition, the proliferation of multiple applications combined with several years of rapid growth, mergers and acquisitions, and a roller coaster economic market have left organizations with large gaps between both people and applications. The result is inefficiency, a general lack of control over and visibility into what is going on in core processes, and the inability to change fast enough to keep up with dynamic market conditions.
It’s Back—A Focus on Process
To address these issues, organizations are once again looking at their processes and analyzing options to make them more efficient, more consistent and at the same time more agile. And, they are starting to realize that the core, mission-critical processes that are key to the business must be leveraged more effectively to create competitive advantage.
So are we going back to the era of business process re-engineering? Absolutely not. No organization in the world today can afford the time and expense of a wholesale process overhaul, and no IT organization can justify spending money without showing a fast return on that investment. Instead, the focus on process is all about effective business process management (BPM)—the ability to automate, manage and control business processes to drive greater efficiency, control and agility across the organization.
With business process management, the focus is not on complete process redesign, but rather on leveraging BPM software as an infrastructure layer on which to automate existing processes to streamline them, eliminate redundancies, enhance collaboration, improve productivity and provide end-to-end visibility into what is happening in the process. The best BPM software packages on the market today will enable you to get a process up and running very quickly—within weeks—so that you can demonstrate immediate ROI. In addition, BPM software that is designed to support complex, enterprise-wide processes gives you a solution that can be leveraged across all processes in your organization, providing consistency in user experience, a central point for process maintenance, and a technology that delivers continuous return and value.
The visibility and reporting and analysis capabilities provided by BPM enable organizations to identify and implement incremental process improvements over time, resulting in continuous process improvement that delivers real results. BPM applications have been on the market long enough to prove their value, but they are still new enough that leading-edge organizations are gaining rapid competitive advantage as a result of deploying the technology throughout their enterprise. Best of all, there are many practical applications for business process management that will enable you to solve big, headache-inducing problems today.
Compliance & Risk Management
A huge, looming issue for most organizations is conformance to regulatory requirements. These include internally driven initiatives such as Six Sigma and ISO 9000, as well as the government-mandated regulations that are emerging so rapidly in every industry that heads are spinning. Financial organizations face Basel II and the Patriot Act. Government organizations have GPEA, eFOIA and homeland security. Healthcare organizations face HIPAA and an overwhelming list of medical and drug standards. And who out there in the business world is not thinking about the looming Sarbanes-Oxley compliance deadline?
Business process management software delivers a mechanism for creating consistent, repeatable processes that can enforce process adherence, ensure authorization and security, and maintain an audit trail of both content and actions that are critical to the process. The software can be implemented quickly, providing relief to the millions of IT organizations and executives facing short compliance deadlines. And best of all, BPM software has been proven to be an effective application for compliance and risk management.
Take for example Blue Rhino—a major distributor of propane gas cylinders, grill accessories and other outdoor products. A publicly held company with a fiscal year ending in July, Blue Rhino must have its Sarbanes-Oxley compliance solution up and running by December 31, 2003—yes, the end of this year—in order to meet compliance requirements. Blue Rhino selected BPM software from Metastorm earlier this year and is on track to have all of its accounting and financial reporting processes designed, implemented and running in the software across the organization by the end of this year. The payback comes not only in greater efficiency but also in much lower financial and corporate risk.
Metastorm BPM software is also up and running in other organizations for compliance and risk management initiatives that include ISO 9001, Basel II compliance, Patriot Act compliance and anti-money laundering regulations around the world.
Supply Chain & Customer Service
Another area in which you can gain immediate value from BPM software is across your supply chain operations. By nature, supply chain processes are a perfect fit for BPM—they are critical to the business, they involve numerous organizations, efficiency and visibility are essential to competitiveness, and they span multiple applications and systems. In addition, the ability to incorporate human involvement and intelligence throughout the process is essential. Processes such as new product introduction, engineering change orders, order management and strategic sourcing are areas in which rapid value can be realized from the application of BPM software.
Companies such as Cooper Tire, Tetra and Fiat are already leveraging business process management to improve supply chain operations.
Equally mission critical are your customer service processes. What organization does not want happy customers? Nothing frustrates and loses a customer faster than an inefficient, ineffective process that prevents them from getting what they want, when they want it. Because it links together multiple organizations and multiple systems, business process management software gives customer service personnel and managers the tools they need to expedite responsiveness, obtain total visibility into the status of customer requests, and achieve significant improvements in customer service levels very quickly. In addition, the best BPM tools are designed to support heavy people involvement in the process, including direct access by end customers. This empowers customers to initiate, monitor and participate in the process, thereby improving the control they feel over their own satisfaction.
Reflective of BPM’s rapid adoption in multiple industries, organizations such as Clarks, a manufacturer/distributor of shoes, and CIT Group, a large financial services company, have both created Web-based customer service portals powered by underlying BPM technology that automates, manages and controls customer-facing processes.
Internal Operations
While the most strategic value may come from applying BPM to your mission-critical processes, much benefit can also be obtained by leveraging BPM across internal processes in order to lower costs and improve employee productivity and morale. In addition, putting internal processes onto a BPM infrastructure gets the technology into the hands of employees throughout the organization, facilitating rapid adoption and acceptance of the technology for application in more mission critical process areas. Many companies take the approach of starting with internal operations processes to prove out the software prior to affecting more mission-critical processes, while others dive right into strategic, high-value processes.
Wilmington Trust, a publicly held financial services company, took a parallel approach—implementing two processes concurrently during its initial implementation of BPM software. Like Blue Rhino, Wilmington Trust is using Metastorm’s BPM solution. To start, the company implemented both its expense reporting and its new business analysis procedures. The expense reporting process enabled IT to get the application in the hands of the entire company, thereby easing change-management challenges; and the new business analysis procedure allowed the company to realize immediate business value from the BPM application. Since this initial effort, Wilmington Trust has implemented more than 10 additional processes on the Metastorm BPM software platform.
The practical applications for business process management technology are infinite. Where you choose to start will depend on what areas are causing you the most pain today. But rest assured that your investment in alleviating your pain short-term will also payoff in long-term value and ongoing ROI for your entire organization.
Process Capital
“Most likely you can identify at least a handful of processes that you believe are unique to your organization—areas that you pride yourself on in terms of being better, faster, and more innovative than others in the market.
It is these unique, mission critical processes that are your process capital. The key to success is first recognizing that you have process capital and then learning how to leverage that process capital for strategic advantage.”
—Laura Mooney, Metastorm, Inc.
Blue Rhino Leverages BPM for Sarbanes-Oxley Compliance
Blue Rhino is the leading national provider of branded propane cylinder exchange and complementary propane-fueled products to consumers. Since its inception in 1994, the company has seen tremendous growth. To manage continued growth, Blue Rhino needed to be able to improve its internal process controls, provide a more efficient work environment, and maintain a certain level of control and insight over how the business is running. In addition to addressing its process inefficiencies, Blue Rhino needed to quickly address its Sarbanes-Oxley compliance challenge. Blue Rhino plans to lead the charge by being one of the first companies in the United States to meet compliance requirements for the Sarbanes-Oxley Act. Driven by an early fiscal-year close, Blue Rhino must have its compliance systems in place and running by the end of 2003.
Blue Rhino conducted a competitive review of BPM solutions to find the best fit to meet their needs and one that would integrate with its existing infrastructure. It selected BPM software from Metastorm. A key driver for the selection of Metastorm was its ability to integrate very quickly with Blue Rhino’s existing infrastructure, including its database repository and corporate portal. Other key differentiators of Metastorm were the flexibility and ease-of-use the product provides to end users, Metastorm’s ability to help the company comply with the Sarbanes-Oxley Act, and the ability to deliver a heightened level of information access and control for the company’s management team.
In addition to compliance with Sarbanes-Oxley (compliance and risk management), Blue Rhino plans to leverage the Metastorm BPM solution for other enterprise processes, including inventory procurement and distributor order management (supply chain operations), customer care (customer service) and IT change control (internal operations).
By applying business process management technology in these core areas of its business, Blue Rhino expects to achieve greater efficiencies to lower costs and improve productivity, increase visibility and control to lower risk and achieve compliance, and achieve greater agility to be more responsive and increase market share.
As the leading provider of business process management software for automating, managing, and controlling processes, Metastorm is the only company helping organizations achieve Enterprise Process Advantage™—a heightened level of business performance resulting from increased process efficiency, control, and agility. With a focus on complex, human-centric processes that are unique to their organizations, Metastorm’s 600+ global client base in manufacturing, financial services, business services, and government are achieving rapid ROI and unique process advantage in customer service, supply chain operations, risk management, and internal operations. For more information visit Metastorm
Laura Mooney is the director of Product Marketing for Metastorm. In this capacity, Laura is responsible for corporate positioning, messaging, sales tool development, and overall product strategy for the privately held, global business process management software provider. She also manages the company’s North American public relations and industry analyst programs.