Process Visibility: The Key to Optimizing Business Operations
It’s no mystery that businesses need to react to changing market conditions faster than ever. But how do you improve your current business operations while adapting to constantly changing market and customer needs? One of the keys to this effort is gaining an understanding of your organization’s business processes, which can define how effectively the company is managed.
To address these needs, a new generation of tools is emerging to give executives visibility into business processes, providing essential information for understanding—and improving—their operations.
These tools are critical for businesses in a variety of industries—from manufacturing companies to financial services organizations to government agencies. For example, a mortgage lender with a goal to reduce approval cycle time by 30% could track progress and identify potential roadblocks to achieving the goal. By analyzing various metrics of its business processes, the organization could evaluate types of loans processed, processing time for each, customer response time, productivity per employee, and also take corrective action to realign any areas of the process.
This article describes the market drivers and customer requirements for business process analysis and reporting, and describes new reporting and analysis solutions that can add to the bottom line by helping companies measure and improve their business processes.
Demand for Analytic Applications on the Rise
With the exponential growth in corporate data, managers need faster, more granular and more flexible information processing. At the same time, sifting through the data to identify the organization’s strengths and weaknesses remains a daunting task.
Business visibility is the term that best describes the ability to sort through vast amounts of data to provide insight into the effectiveness of business processes. Using comprehensive metrics and reports, executives can identify business patterns, make more timely decisions and continuously improve the processes that drive their operations.
Industry experts agree that the ability to analyze process performance is a critical element of maximizing the returns enterprises realize from their Business Process Management (BPM) investments.
“Now more than ever, enterprises are looking for a rapid ROI from their process technology investments,” says Jim Sinur, vice president and research area director at Gartner Group. “Understanding process performance is key to demonstrating the value of BPM implementations—and a critical component of the end-to-end BPM functionality that successful businesses require in today’s marketplace.”
Enhancing Business Value by Monitoring Process Performance
To the end user, business visibility provides interactive reports that allow them to monitor their processes, and if necessary, drill down into the detail of what they are monitoring. Visibility into these processes can provide critical information for understanding customer needs, assessing organizational strengths and weaknesses, and guiding executive decision making.
Monitoring is typically implemented in a Business Management Console (BMC), where high-level reports are constantly updated to reflect the changing business metrics. This approach is very useful in helping business users understand how current performance metrics compare to estimated standards of performance, otherwise known as Key Performance Indicators (KPIs).
If one of the KPIs falls out of the specified range, managers can click on the relevant report and drill down to a more granular view of the data. From here, the user may organize the data to determine a cause and effect relationship, and take corrective action to fix the problem.
For the mortgage lending organization mentioned in the previous example, a quick approval cycle time would be considered one of the company’s KPIs. In this case, the line-of-business manager might want to request detailed reports if approval cycle times went beyond the desired goal. These detailed reports would help identify information such as cycle time by day of the week, by time of day or by employee to help pinpoint potential causes of any approval delays.
New Reporting Mechanisms Improve Organizational Agility
Traditional reporting mechanisms interrogate data stored in a database. A programmer or business analyst, in consultation with the user, usually implements the report templates. As a result, these reports are typically static in nature and difficult to modify.
The data structures of a traditional database do not provide the required flexibility for producing interactive reports. This approach, therefore, limits an organization’s agility and its ability to react to changing market conditions because valuable time is lost in creating new reports.
To provide true business visibility, a new data structure is needed. This structure is an online analytical processing (OLAP) data cube. OLAP is a category of database software technology that enables analysts, managers and executives to gain insight into data through fast, consistent and interactive access to a variety of possible views of the same information.
Data cubes differ from traditional relational database representations in that they store the entire data set in a multi-dimensional format. This can be queried through a BMC or drag-and-drop spreadsheet tools like Microsoft Excel.
Two types of data cubes are required to address the needs of business visibility: real-time cubes for system monitoring and historical cubes for in-depth analysis. Referencing the mortgage lending organization mentioned earlier, management could track approval cycle time using a real-time cube. It could also use a historical data cube to measure cycle time by employee, region or month, or examine other more detailed metrics.
Moving BPM into the Front Office
Until recently, process-analysis solutions have been add-on packages that required costly and time-consuming integration. Today, analysis tools are available that make process analysis data accessible for line-of-business managers and executives. With an easy-to-use interface based on popular applications such as Microsoft Excel, these new analytics packages monitor data without the added time and expense of an outside analyst or consultant. They also offer sophisticated reporting and analytics capabilities, including the ability to create customized and detailed reports on the fly.
Simulation Capabilities Enable Continuous Process Improvement
Next-generation process analysis tools will incorporate simulation capabilities that allow business analysts to model business processes and then simulate them under real-world conditions. This will allow managers to uncover potential bottlenecks as well as resource or cycle time issues, and will enable processes to be tested and optimized before being put into a production environment.
Business analysts will be able to use their own simulation data, historical data or a combination of both as input into the simulation tool. To improve the original model, analysts will replicate a process, simulate it, deploy it in production, report on its performance and use historical data as input into the simulation tool.
Driving ROI Through Business Visibility
Numerous organizations have used BPM technology to enhance efficiency while using fewer resources. For example, Standard Bank of South Africa improved productivity by 140%, while decreasing financial decision cycle time from one week to seven minutes. In addition, Advance Bank, the first German banking institution to redesign and automate the complex process of opening an account via the Web, dramatically reduced bank processing time and costs, and enhanced its competitive edge with faster service and improved quality.
By understanding process performance and gaining greater business visibility, organizations can optimize their ROI from BPM initiatives. Through detailed data analysis on business processes, the business analyst and user can improve existing business processes, remove bottlenecks and repurpose underutilized resources. In this way, business visibility is essential for enterprises seeking to maximize the value from BPM implementations.
FileNet Corporation provides The Substance Behind eBusiness™ by delivering Enterprise Content Management (ECM) solutions that enable organizations to realize increased productivity, customer satisfaction and profitability by empowering customers, business partners, suppliers, and employees to engage in business processes and exchange relevant content. For more information on FileNet’s ECM solutions, visit www.FileNet.com.