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BPM: from the user's perspective

Keeps train moving

One of the valuable but less obvious functions of BPM is its ability to serve as a de facto integration tool that connects processes throughout the enterprise, as each new one is automated.

"Moving the work along requires that various systems be accessed in a seamless, transparent way," says Paul Roth, VP of integration at Metastorm. In the past, integration with other applications required considerable effort, but today's service-oriented architecture makes it easier. Existing systems can be more readily leveraged, which is less disruptive to companies.

"Organizations don't want to stop the train to change wheels," says Roth. "They want to keep moving, and BPM allows them to use what they have in a much more efficient way, without having to revamp all their other systems."

More accurate admin processes

BPM applications do not need to be complex to be worthwhile. National Grid, a distributor of electricity and natural gas in the Northeast, wanted a more consistent and accurate way of ordering printed materials, including forms used by employees and information sent to customers. The company selected the Ultimus BPM Suite to automate the process. Prior to using Ultimus, employees might submit orders via phone, fax or in person. Larger requests were sent to the warehouse, while smaller ones were fulfilled by an in-house print shop.

Once the Ultimus system was in place, accuracy and timeliness of orders both improved. "We found that requests were no longer falling through the cracks," says Andrew Bort, senior system analyst for the IT department at National Grid. "In addition, we got a quicker turnaround, because orders that had requests to both the print shop and the warehouse were submitted in parallel rather than sequentially."

As is often the case with BPM implementations, another process was automated after Ultimus was available--in this case, an investment recovery initiative that brings about $6 million in revenue per year. National Grid sells items they no longer use, including office equipment, vehicles and materials. In the past, the process for that investment recovery was not well documented or carried out in the most efficient way. A simple workflow to track the sales resulted in a smoother, less error-prone process.

The financial services and insurance industries have been early adopters of BPM, but several other sectors where use is low now could benefit substantially. According to Rashid Khan, CEO of Ultimus, medical service providers and government organizations could both make excellent use of BPM.

"Customer care in the medical business involves a good deal of routing and many processes," says Khan, "but several factors have limited its use so far." He cites the heterogeneity of the IT infrastructure, such as a mix of Macintosh and PCs in office environments, and the complexity of the content, which might include images, charts and other documentation.

In the government sector, the extensive amount of paperwork in many agencies would be aided by automation. However, Khan notes that many of those processes are complex and might be daunting to implement. Unlike some systems, though, BPM can be implemented in stages.

"The beauty of BPM is that you can automate one or two processes, then a few more, and prove it as you go," Khan says. "You don't need to automate an entire department at once, as you would with an ERP system."

Early adopters refine applications

The health insurance industry was an early adopter of BPM in the form of automated claims processing. Over the years, those systems have been enhanced to provide a greater level of sophistication.

HealthNow NY is the parent organization for health insurance payers' BlueCross BlueShield of Western New York and BlueShield of Northeastern New York. The company first installed an OCR product to facilitate data entry of paper claims, and then wanted a software tool with a business rules engine to augment its adjudication system. One goal was to improve the "first-pass" rate, so that claims would be processed immediately upon adjudication and without manual review. Business rule consolidation, processing efficiencies and payment accuracy were additional goals of the HealthNow claims re-engineering initiative.

HealthNow decided Pegasystems was the best match for its needs after examining the product's use in several other Blue Cross/Blue Shields plans. Functions of particular value to HealthNow included the ability to use the product on the back end for pended claims, through intelligent workflow routing and direct interfaces to their claims adjudication system. In addition, an automated interface between Pegasystems and HealthNow's IBM (ibm.com) imaging system allowed authorizers to see claims images without going to another application.

"Based on the Pegasystems workflow automation, pended claims inventory was reduced by 40 percent within the first month," says Michael Kerl, manager of e-commerce for HealthNow, "in part because the reviewers no longer worked from paper reports."

The next phase of HealthNow's Pegasystems implementation focused on a pre-adjudication business rules engine. The pre-adjudication application was developed to improve the first-pass rate by validating the claim before it is processed. For example, a comparison is made between the member ID shown on the claim to the HealthNow's membership system. A Pegasystems business rule then applies the correct "group number" to the claim so it correctly passes through adjudication edits. Those validations are run in batch mode and ensure claims adjudicate accurately with a high first-pass rate, reducing administrative costs.

All-purpose tool

BPM technology is one the most versatile enterprise software products in use today. "It is analogous to a relational database," says Jay Sherry, VP of marketing and solution frameworks at Pegasystems. "It is a cross-industry, general-purpose tool that can be applied in many ways." Because BPM has many potential purposes, customers do not always realize right away that a product bought for one specific use, such as compliance, can be useful for ordering forms. But as organizations gain more experience in using BPM, the opportunities also become more evident, and its presence more widespread.

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

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