Delivering Competitive Advantage Through BPM (Print Edition)
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Delivering Competitive Advantage Through BPM (Print Edition)
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What is Competitive Advantage?
Some organizations significantly outperform others in their industry. They become more agile by adopting smarter work practices and transforming their business processes to be more dynamic, collaborative, and connected.
Often, the business processes themselves create competitive advantage. Increased revenue at reduced cost makes more money for a very effective business. Changing market opportunities, customer demands, new technology and calls for cost reduction can make it seem impossible to keep operational chaos at bay.
Competitive advantage is gained when companies reduce operational risk by making sure that internal guidelines and external regulatory requirements are fulfilled. Companies thus offer customers a faster, more accurate and consistent service.
To position your organization for success, you need the ability to continually optimize, streamline and align business processes to meet changing business needs for greater performance, competitive advantage and to drive growth.
The companies whose award-winning case studies are featured in this book have proven excellence in their creative and successful deployment of advanced and business process management concepts. The positive impact to their corporations includes increased revenues, more productive and satisfied employees, product enhancements, better customer service and quality improvements.
Read these detailed case studies to find out how these award-winners moved the competitive goalposts for their industry.
The criteria for submitting an entry are fairly simple: the project should have been operational for six months prior to nomination, and have been installed within the past two years. The submission guidelines, however, are more detailed. To be recognized as winners, companies must address three critical areas: excellence in innovation, excellence in implementation and excellence in strategic impact to the organization. Details are at www.bpmf.org.
Innovation encompasses the innovative use of technology for strategic business objectives; the complexity of the underlying business process and IT architecture; the creative and successful deployment of advanced workflow and imaging concepts; and process innovations through business process reengineering and/or continuous improvements.
Hallmarks of a successful implementation include extensive user and line management involvement in the project while successfully managing change during the implementation process. Factors impacting the level of difficulty in achieving a successful implementation include the system complexity; integration with other advanced technologies; and the scope and scale of the implementation (e.g. size, geography, inter-company processes).
Impact is the bottom line, answering the question, “What benefit does BPM deliver to my business? Why should I care?”
Using BPM for Competitive Advantage
Examples of potential benefits include: productivity improvements; cost savings; increased revenues; product enhancements; improved customer service; improved quality; strategic impact to the organization’s mission; enabling culture change; and—most importantly—changing the company’s competitive position in the market. The visionary focus is now toward strategic benefits, in contrast to marginal cost savings and productivity enhancements.
While successes in these categories are prerequisites for winning a Global Excellence Award, it would reward all companies to focus on excelling in innovation, implementation and impact when installing BPM and workflow technologies. Companies must recognize that implementing innovative technology is useless unless the organization has a successful approach that delivers—and even surpasses—the anticipated benefits.
Submit an Entry
The annual Global Excellence Awards for BPM and Workflow are sponsored by WfMC.org and BPM.com. The prestigious annual Awards are highly coveted by organizations that seek recognition for their achievements. Now evolved into their 20th year, originally starting with, and moving through, imaging, documentation, knowledge management and more, as our industry moved forward, these awards not only provide a spotlight for companies that truly deserve recognition, but provide tremendous insights for organizations wishing to emulate the winners’ successes.
General information and guidelines for submissions may be found at www.bpmf.org.
Contents and Chapter Abstracts
Evolution of BPM: Combining Business Architecture, Intelligence, Case Management to Accelerate Process Implementations
Meera Srinivasan and Linus Chow, Oracle
Over the past five years, adoption of BPM has increased dramatically and customers using BPM tools for management of their business processes has also exploded exponentially. The primary focus of the majority of these BPM Projects is around automation and shortening the time taken to complete the end to end process. These BPM initiatives are largely confined to small footprint, departmental and tactical projects. However, BPM is much more than process automation, cost cutting and improving performance. BPM is about empowering business to take control, achieving efficiency in end user interactions with the process, monitoring key business insights for continuous process optimizations, attaining unprecedented agility to react to changing market conditions and improving customer satisfaction. This paper looks at some of the emerging new trends in BPM and how next generation BPM platforms support these trends to get higher value from BPM initiatives.
Transforming the Business for a new Customer Segment: The Role of BPM in the New Business Model
J. Bryan Lail, Raytheon
Extensive research across industries has shown that success in a new market or distinct new customer segment requires a transformation within the business driven by the value proposition, partnering approach and new types of revenue streams. This transformation does not happen easily, but has been achieved through development of a thorough business model1 describing the new environment and the resulting changes necessitated within the business roles, processes and cost structures. An effective business model touches many aspects of customer focus, partnering, financials, human resources and business process changes.
There is a strong connection that can be made between a business process model focused on strategic levels of functional integration and the concrete execution of a new business model. This paper shows the general aspects of the business model canvas that can benefit from the rigor of business capability mapping and process modeling, then provides examples. The views shown will certainly depend on the audience for presenting the business model defining a strategic transformation, since executives are unlikely to benefit from a multi-hierarchal BPMN diagram, but the diagrams under the hood can provide the real structure and tactical path to a model that may otherwise become shelf-ware.
BPM Change Management: Some Considerations
Jaisundar Venkat, Wipro
As Business Process Management (BPM) becomes more mainstream and its adoption increases, the list of key factors that typically contribute to its failure as well as success are becoming more and more apparent.
Interestingly, one factor common in both lists is Change Management. The reason that it figures in both lists is because, not only can poorly addressed change issues lead to failure, but a well-managed change plan can actuallyescalate the degree of success from BPM. Change issues threaten and impact BPM implementation success much more than we would care to admit. Challenges along the BPM life-cycle are real and the nature of change can be complex. This paper discusses how a well-thought out Change Program can complement a BPM initiative and actually help in fostering collaboration and teamwork required along the stages of the BPM lifecycle by introducing a more positive influence on the outcome. Fundamentally though, there are some very crucial elements or hotspots if you would like to call it, that need to be appropriately addressed to ensure the Change Management program supports BPM optimally.
Innovation in Health Care: Insight from the First Federal Health Care Center
Paul Lam, Captain James A. Lovell Federal Health Care Center and Linus Chow, Oracle
Combine enormously complex data integration with the most sensitive, yet essential, case management processes run by two of the largest organizations in the world, and you have one of the biggest challenges facing the United States. Improving health care efficiency and effectiveness, while cutting costs, is the only way to solve the U.S. health care crisis. The pain can be especially acute for the U.S. Armed Forces, where both Veterans Affairs (VA) and the Department of Defense (DOD) are looking for ways to streamline operations to provide higher quality care while cutting inefficiencies in the system.
Section 1: Europe
Avio SpA, Italy
Silver Award: Nominated by EKA Srl, Italy
Avio is a world-wide leader in the aerospace industry. Based in Italy, Avio is a leading supplier of engine modules and components and it also operates in aircraft engines repair and overhaul with its Avioservice Division. In 2009, Avioservice Division started a new initiative for streamlining its Maintenance, Repair and Overhaul (MR&O) process of military engines in order to be able to sustain the new business and market conditions. The main objective of this initiative was to improve the performance of the process in meeting contractual SLAs in a new business environment where the repair and overhaul of several engines types, coming from completely new customers, is regulated by very different and very specific contractual agreements. As a result of the initiative, a system has been developed to govern the workflow of each engine in its company’s “door-to-door” path and to collect actual performance measurements of the overall process which spans several organizational units.
HanseMerkur Insurance Group, Germany
Gold Award: Nominated by Bosch Software
The objective of the project was to implement a process-oriented architecture including the standardization and improvement of user interface ergonomics. The goal was to raise the degree of automation in claims processing to absorb an annual increase in gross revenue by 10-15 percent with an equal increase in claims, as well as to relieve clerks of simple routine tasks.
The annual increase in gross revenue could be absorbed by automated claims processes, which meant that the number of experts needed for processing was almost stable. This is an equivalent of € 0.75 million in cost savings per year and rising. In addition, the implementation of a rules engine for regulatory rules resulted in an increase of one percent in claims rejection or over € 1.65 million per year and growing. Claims processing time could be reduced from an average two weeks in the past to a few hours. The new automated process frees claims experts from routine tasks and lets them work on unclear or complex cases. On the other hand, simple tasks as obtaining missing data or correcting errors can now easily be diverted to less qualified personnel.
Homeloan Management Limited, United Kingdom
Finalist: Nominated by IBM, USA
HML is the UK’s largest mortgage servicer, providing outsourced mortgage administration for more than 50 UK and Irish clients, and operating out of three UK locations. The company was established in 1988 and is a wholly-owned subsidiary of Skipton Building Society. It manages around £43bn for some of the largest players in the UK and US financial markets.
HML’s first BPM initiative, the credit management workflow system (CREWS) was initiated to address these requirements and contain cost. CREWS delivered automated functionality for HML’s pre-litigation department. Feedback was gathered from the business area to continuously improve CREWS over the next two years and ensure what was delivered was in line with business requirements, therefore eliminating any rework. From 2010 through 2011, HML delivered significant enhancements to the initial CREWS application, with improvements in query responsiveness, agile development methodology and improved process efficiency. In addition, in early 2011, a new credit management enhancement project was completed to augment CREWS with possessions process automation.
Jardine Lloyd Thompson, UK
Gold Award: Nominated by HandySoft, USA
Formed in 1997 from the merger of Lloyd Thompson and Jardine Insurance Broker, Jardine Lloyd Thompson (JLT) is an international group of Risk Specialists and Employee Benefits Consultants. JLT is listed on the London Stock Exchange and is one of the largest companies of its type in the world.
The EB Group within Jardine Lloyd Thompson (JLT EB) made up £132 million of this 2010 turnover with 1500 employees in offices in the UK and India.
Between 2007-2010, JLT made more than 20 acquisitions globally across the group. JLT EB operations quickly became highly complex, distributed and paper-based. Employees were handling millions of documents annually covering Pension Administration, Payroll, Defined Contributions, Actuarial, Health and Risk, among other requests. Processes treated more than 16 million workflow elements, 300+ million rows of table data and 15 million SharePoint documents. JLT EB accomplished its goals of increased revenues with lower costs with continual investment in BPM. JLT EB has used BPM to streamline >200 processes. From an ROI standpoint, this work has provided a key business component, contributing to JLT EB’s growth in trading profit by 50% in the last financial year.
Toyota España, Spain
Finalist: nominated by AuraPortal, USA
Toyota is a well-known, leading worldwide automobile manufacturer. In Spain it is represented through its subsidiary Toyota España, which has a broad network of dealers to cover the Spanish territory, providing selling and technical assistance to end customers. The Toyota dealers are grouped into an association, who, sponsored by Toyota, took on the BPMS project in order to build an Intranet to manage and control their own environmental best practices according to Toyota policies and the ISO 14001 standard. Thus, the BPMS allowed the more than 250 Toyota dealers within the network to meet environmental Toyota practices with less human effort and the fewer technical and economic resources.
Section 2: Middle East and Africa
Ecobank LLC, Senegal
Silver Award: Nominated by Newgen Software Technologies Ltd, India
ECObank, the leading pan-African bank, was established as a bank holding company in 1985 under a private sector initiative spearheaded by the Federation of West African Chambers of Commerce and Industry with the support of ECOWAS. Spanned across more than 32 countries, the bank operates as “One Bank” with common branding, standards, policies and processes to provide a consistent and reliable service to its customers. Today, the bank operates in more than 755 branches and they have 779 ATMs and 888 points of sale (POSs ).
Riyadh Military Hospital, Saudi Arabia
Gold Award: Nominated by Bizagi, UK
Al-Wazarat Health Center (WHC) is located in Riyadh City, the capital of Saudi Arabia. The center is associated with the Riyadh MilitaryHospital Program. RMH is part of the Medical Services Department (MSD) of the Ministry of Defense and Aviation (MODA). The center is specialized as a Family and Community Medicine Department, with a large practitioner service and is currently incorporating a dermatology clinic, well women’s clinic, and a pediatric clinic to accommodate the growing population and to further enhance the quality of patient care. In addition to the ordinary healthcare facility and auxiliary, the center also contains other medical facilities such as a Pharmacy Department, Radiology Department, treatment rooms, specimen rooms, resuscitation and ECG rooms, and a nebulizing room.
Section 3: North America
Danfoss Power Electronics, USA
Silver Award: Nominated by Aalborg University, Denmark
This case study presents the experiences of a manufacturing company with taking the first step towards adopting BPM. The company used process mining in SAP to tackle a highly turbulent inquiry-to-invoice process which hindered customer relationships and employee satisfaction. The case highlights the steps of getting from raw event data to business implications. It shows how using a combination of interdisciplinary skills and basic technology applications can be a springboard leading to a wider adoption of BPM in companies with a previously low process orientation.
National Institute of Mental Health, USA
Finalist: Nominated by BP Logix, Inc., USA
There is a critical need within the government to manage IT procurements in such a way as to ensure compliance with organizational and governmental standards, to secure the appropriate review and approvals for all such procurements, and to account for procurements and expenditures. To achieve this objective, the National Institute of Mental Health (NIMH), part of the National Institutes of Health (NIH), needed a more effective methodology and a more efficient business process for acquiring, tracking and managing IT equipment procurement. NIMH was able to accomplish this goal by designing a procurement process that supported compliance requirements, while also providing a comprehensive review and approval process for all procurements. To develop and implement that process, NIMH licensed business process management (BPM) software to automate and streamline its IT Procurement system.
Naval Special Warfare Group Four Government Purchase Card Program, USA.
Silver Award: Nominated by HandySoft, USA
Naval Special Warfare (NSW) is a division within the U.S. Navy that includes more than 2,400 active-duty Special Warfare Operators, known as SEALs. All of these personnel are divided among “groups”. NSW Group 4 (NSWG4) consists of three Special Boat Teams (SBT) and one international training command—all working together towards the common goal of fighting the global war on terrorism. In the past, NSWG4 always had more than adequate numbers of craft, engines and spare parts. However, with today’s current high demand for combat operations, security force assistance (SFA) and fiscal downsizing, NSWG4 had to develop a different business sustainment model to complete missions with less assets.
The solution expertly weaves Lean Six Sigma, Agile, and dynamic BPM into a system called SWIFT—which successfully met this challenge, and exceeded expectations.
County of San Joaquin, USA
Gold Award: Nominated by Oracle USA
The modernization of San Joaquin County’s Integrated Justice Information System (IJIS) was a strategic initiative that started with setting our visions and goals to modernize interfaces and functions that continue to support the law and justice duties of the residents of San Joaquin County, Sheriff’s Office, Public Defender, District Attorney and Probation Department, as well as the needs of other local, state and national law enforcement entities. We focused on reducing unnecessary redundancy and consolidating like functions to decrease costs and improve overall system performance. Additionally, new nationwide standards, such as National Information Exchange Model (NIEM) would allow us to collaborate more effectively with state and national law enforcement. This modernization is critical to San Joaquin’s support of law enforcement and the public safety of over 650,000 residents. Our choice to modernize IJIS using Business Process Management (BPM) and Service Oriented Architecture (SOA) technologies aligned with our strategic vision of lowering our business risks by providing agility with phased modernization:
Section 4: Pacific Rim
Audi Japan KK, Japan
Gold Award: Nominated by Bizagi, UK
At a certain point of business maturity, companies find it necessary to increase productivity and efficiency in order to stay ahead of industry standards. Audi Japan KK, importer of Audi vehicles and subsidiary of Audi AG, discovered that to reach operational efficiency it was necessary to gain more control and visibility over its core management and administrative processes.
A year ago, Audi Japan KK decided to begin the automation of several of their core back-end administrative processes within the financial department; processes that were found to be too manual and paper-based, which made them inefficient and difficult to manage.
They were also clear about getting a solution that was easy-to use, painless to implement and would automate everyday processes. The objective was to increase transparency and quality, and reducing reliance on paper-based trails and processes. This solution also needed to be replicable in other company departments and Audi subsidiaries around the world.
Viteos Capital Market Services Ltd., India
Silver Award: Nominated by EMC, United States
Viteos Capital Market Services Ltd. (Viteos) is a hedge fund administrator and operations service provider for financial services companies. As a small, but quickly growing company, Viteos began to outgrow its systems and sought a solution that could automate manual processes, reduce paperwork, help the company meet compliance standards, scale up or down to meet changing demands, and remain cost-effective. The company arrived at a solution that combined an element of its existing system—Microsoft SharePoint—with a more robust business process management (BPM) and document-management solution—EMC Documentum xCelerated Composition Platform (xCP)—as well as virtualization with VMware. This combination enabled the company to meet its increasing document processing needs while maintaining familiarity for its users.
Section 5: South and Central America
Carbones de Cerrejón, Colombia.
Finalist: Nominated by Bizagi, United Kingdom
Cerrejon is the largest open-pit coal mine in the world, with 30 years in the market, and an integrated operation which involves a thermal coalmine, a railroad of 150 kilometers and a seaport able to receive ships of up to 180 thousand tons of capacity. Cerrejon was looking to improve the coordination and orchestration between several areas – the commercialization offices (Dublin and Atlanta),
For this, Cerrejon required a collaborative solution that besides bringing agility to the business, offered flexibility and would allow satisfying the requirements of local regulations. Cerrejon selected Bizagi BPM Suite to automate the coal sales process, which integrated to its ERP, would enable the management of all the transactions derived from the commercialization of the coal, consolidating a robust platform for the conciliation of payments and collections.
CONAGUA: Comisión Nacional del Agua, Mexico
Gold Award: Nominated by PECTRA Technology, USA
As a result of regulations and initiatives of the Government of Mexico in 2004, the Subdirección General de Infraestructura Hidroagrícola of CONAGUA –Comisión Nacional del Aguadecided to start a BPM project in order to standardize, organ-ize and control the management processes of budgetary resources for public works and procurement services (more than one thousand million dollars each year), through an online system of information available for public consultation by citizens. With over seven years of implementing BPM, the CONAGUASubdirección General de Infraestructura Hidroagrícola reports multiple benefits: greater adoption of BPM (from 1 to 18 processes in place, with 700% growth in number of users and the incorporation 23 new states, 13 regions and 15 cities to the project), a recovery of the total investment in the first 18 months and savings in materials / supplies of USD340,000 a year and current expenditure of USD238,000, greater employee satisfaction (50 and 76%) due to a 67% reduction in administrative and manual activities -mostly reporting; improved citizen perception and credibility due to availability of information about the public works for hydro-agricultural infra-structure development; numerous awards received.
Grupo Hospitalar Conceição, Brazil
Silver Award: Nominated by H&R Consultores, Brazil
Grupo Hospitalar Conceição (GHC) is the largest hospital complex in the State of Rio Grande do Sul, Brazil, and responsible for the admission of 59,900 people, 2.2 million appointments, and 36,100 annual surgeries. The group comprises four hospital units, twelve health clinics, and three psychosocial care centers.
GHC pursues excellence in providing healthcare to the population as we supply state-run health services given that we are connected to the Ministry of Health and are totally dedicated to users of Sistema Único de Saúde – SUS (the public healthcare system).
Besides providing the population with healthcare, Grupo Hospitalar Conceição is also dedicated to fostering education and research, thus becoming a center of knowledge and people training for SUS. To reach our mission of developing full healthcare actions with organizational excellence and efficacy, our group employs technological and human resources and education and research programs.