BPM, enterprisewide and beyond
Business process management (BPM) software products have been among the most robust in the knowledge management arena, resisting a decline in revenue and in the case of some vendors, showing healthy growth. Sales that were level in the past year are expected to grow from just over $2 billion in 2009 to $2.5 billion in 2010. “The fact that BPM held up during this period attests to its value during economically challenging times,” says Ken Vollmer, principal research analyst at Forrester.
Moreover, organizations have a broader vision of how BPM can be used across the enterprise. They may still start with one department, as has been typical in the past, but the plan is to deploy BPM pervasively.
Goal: complete view
Diebold—a manufacturer of automated teller machines (ATMs) and security equipment used in financial, retail, government and commercial markets—began looking into using a BPM solution to achieve process improvement and standardization. “We wanted one place where we could get complete visibility to our order fulfillment process from the time we receive an order, through production and customer signoff after successful installation,” says Mike Hinnebusch, director of business process re-engineering at Diebold. “We also wanted to make our internal processes as efficient as possible.”
The search team explored the options for BPM solutions, issued an RFP and evaluated the vendors across a set of criteria that had been developed in consultation with business users and the IT staff at Diebold. The top vendors made presentations, and the Savvion BPM Suite was selected as the best match for Diebold’s needs. Key features were the usability of Savvion Modeler by business analysts and subject matter experts, as well as the flexibility of the execution module, Business Manager.
The first process to be deployed across multiple functions using Business Manager involved order status and active monitoring. “The system tracks when an order is placed,” Hinnebusch explains, “and from there on we can see when production was completed, when the item was shipped and installed, and when the customer signed off.” Customer sign-off triggers billing, and when the invoice is paid, the order is closed out.
Business Manager allows Diebold to draw data from several different information systems to provide a comprehensive view of its order process. “The order entry data comes from our ERP system, and production uses a custom database we developed in house,” Hinnebusch adds. “I can ping the Savvion system along any of the steps.” Previously, each of several systems would have to be accessed to find out the order’s status.
Since the initial deployment, Diebold has extended Business Manager so that it can detect whether production is completed and at which production station the item is currently located. Sub-processes have also been added, such as engineering waivers that allow approved substitution for a part that varies from the one originally specified. The production system and the order status system are now being integrated so that users can drill down directly from the order status to obtain the production details.
With quality assurance ranking as a high priority for Diebold, the company wanted to streamline its issue resolution process. Because it was a single function and therefore simpler to develop, the quality alert process was the first one to be launched in Business Manager. Input from the factory, field workers and other sources is aggregated to ensure that any concerns are quickly identified and resolved. “Because this process is now reflected in Business Manager,” Hinnebusch says, “we are able to determine more quickly if an issue does exist, and to document how long it takes to resolve.”
Finally, the BPM system is allowing Diebold not only to check orders in real time and to analyze processes retrospectively, but also to predict future performance and adapt to changing circumstances. “Since we know how long each step should take, we can forecast where the order should be at a given time and when it should be completed,” he explains. “If we experience a delay along the way, caused by a part shortage, for example, we know that we will have to expedite a later step to stay on schedule. So we are able to work that into our plans and meet our customers’ expectations.”
BPM literacy broadens
Going forward, Diebold plans to use the increased visibility in the order status and quality alert systems to drive more process improvements, expanding the number of processes handled by Business Manager. “We are already having discussions with various departments and external partners on how BPM can drive sustained improvement, cost savings and better value for our customers.” Hinnebusch says.
Savvion evolved from research funded in a university setting and was one of the earliest BPM products on the market. “Every year, we have advanced BPM technology and our product offerings through innovation,” says M.A. Ketabchi, Savvion’s founder and CEO. For example, Savvion has introduced a set of domain foundations oriented toward specific verticals; the foundations run on top of its generic BPM software. “We worked with one of our partners to encapsulate knowledge for the global supply chain, for example,” Ketabchi adds.
Coming up in early 2010 is a new business process improvement (BPI) solution that will allow companies to manage processes both within and outside of their BPM systems. “This is an on-demand solution that will allow our customers to define their processes and tasks, simulate them, set metrics and then monitor performance,” says Ketabchi.
Another point that Ketabchi makes is the increasing degree of sophistication reflected by customers and prospective customers. “Initially we had to explain a lot about BPM,” he says, “such as how it was different from enterprise application integration and other functions. The level of literacy has increased tremendously just in the last year or two, so that we really no longer have to explain what BPM is and how it can help. People understand the technology and see its value.”
Large enterprises typically have hundreds of processes in place that would lend themselves to automation, but it usually takes a champion to make it happen on a large scale. Such was the case at AmerisourceBergen, a pharmaceutical distribution company formed in August 2001 from the merger of AmeriSource and Bergen Brunswig. A Fortune 25 company with revenues of more than $70 billion in 2009, AmerisourceBergen has many complex purchasing and routing processes, most of which were paper-based at the time of the merger.
Distribution companies in general tend not to be techno-savvy, according to Manoj Kumar, manager of business process automation at AmerisourceBergen. “We had a tremendous amount of paper at the beginning of this initiative,” he says, “and many of the processes were not explicitly defined or were redundant. We also needed a software product that was not overly complex, so that we could get our processes up and running quickly.” Kumar had joined the company to improve its processes, and had a clear vision of what he wanted to accomplish.
Many of AmerisourceBergen’s processes were not standardized, so the company began by rethinking them to make them consistent. It also sought a software solution to automate and expedite business activities. The evaluation of software alternatives led to Metastorm BPM, based in part on its ease of use. “The Metastorm Designer, which is used to lay out the processes, is one of the most attractive tools in the Metastorm suite,” says Kumar. “It is very pictographical, so if we show it to a businessperson, the process is very clear.” Both building and implementing processes are relatively simple, according to Kumar.