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BPM's Strategic Benefits Offer Greater Agility Enterprisewide

Banks are taking business process management beyond simple workflow automation to actually measure and optimize processes ranging from online account opening to compliance.

Application Development: Go Speed Racer

That reusability extends beyond the BPM application itself to the processes that it optimizes. Similar to a service-oriented architecture (SOA), BPM speeds application development through process reuse and improves an organization's overall agility.

Pointing to the philosophical similarities and synergies between SOA and BPM, BB&T's Liles advises other banks to "try to coordinate BPM activities with SOA activities." "This was very powerful for us and led to real automation," he says, adding that BB&T has reused BPM-optimized processes for several initiatives. "We've already used it for several other projects: fraud management workflow, marketing lead lifecycle management and payroll services onboarding," Liles relates.

As with SOA, the rapid pace of change in the industry is a major driver of banks' BPM implementations, says Stessa Cohen, research director at Gartner (Stamford, Conn.). "One of the key benefits [of BPM] is around agility," she adds, defining agility as "the ability of an organization to sense change and adapt to it efficiently and effectively."

By enabling the reuse of processes, BPM helps banks adapt to whatever the marketplace requires -- new channels, new devices, new products -- in the shortest amount of time, Cohen continues. "Are you going to re-create the wheel every time [you need to adjust or create a process]?" she asks.

Gene Rawls, VP of continuous development, information services, for Wells Fargo Financial (Des Moines, Iowa) -- a unit of San Francisco-based Wells Fargo & Co. ($575 billion in assets) that provides real estate-secured lending, auto financing, consumer and private-label credit cards, and commercial services to consumers and businesses -- says the bank's businesses initially didn't believe how quickly applications could be built leveraging Austin, Texas-based Lombardi's Teamworks BPM solution. Rawls relates a time when a stunned line-of-business manager turned to him and said, "I didn't think you'd be back so soon," when Rawls delivered Wells Fargo Financial's ($73 billion in assets) first BPM-powered implementation in early 2007.

According to Rawls, there were numerous benefits of that first deployment -- which involved automating dealer setup -- starting with an automated workflow. Now dealer applications are routed automatically from person to person, rather than requiring the pushing of paper files. Rawls says the streamlined workflow has led to increased employee productivity.

"Another benefit is the tracking of work," Rawls adds. Prior to automating and defining the process of dealer setup, a dealer would call to check on the status of his or her application, and a Wells Fargo representative would have to physically find on whomever's desk the application was sitting at the time, without knowing where to start looking, he explains.

"Now there is visibility," Rawls says. Bank employees can just log in and check at which point in the process the dealer's application resides. "It helps the relationship with the dealer and with staffing," he notes.

Application turnaround for dealers used to take an average of seven to 10 days, Rawls continues. With the Lombardi BPM solution, it's down to two to three days, with a one-day turnaround possible if the dealer enters all of his or her information up front, he says.

Further, managers used to spend hours every month generating reports from spreadsheets, Rawls points out. Now the BPM system automatically generates reports for them, collectively saving them an average of 100 hours every month, he asserts.

Then there's the cost savings. While Rawls doesn't have any hard ROI numbers, he says the bank saved $750,000 in 2007 from two new BPM implementations that were rolled out in the middle of last year.

Noting that Wells Fargo Financial currently has nine BPM deployments in production and another four projects in the works, Rawls stresses that not having to reinvent the wheel saves him months of development work for each of his deployments. Project turnaround time from the initial go-ahead for a BPM project to its actual deployment, he says, is just three months.

Despite such impressive results, adopting BPM and a process-centric ideology is not an automatic ticket to success. There are several important best practices and challenges associated with any BPM project, according to experts.

"One challenge is making sure you understand your processes going into this," says Laura Mooney, senior director of corporate communications at Metastorm. Baltimore-based Metastorm offers BPM software as well as software for enterprise architecture and business process analysis. Mooney advises banks to define the scope of their BPM implementation up front, develop a business case and design an implementation with regular milestones.

"An enterprise strategy with local projects is the key to [a BPM] implementation," adds Gartner's Cohen. "It can be a challenge, but breaking it down into small pieces is a way to make it manageable," she says.

Software AG's Garimella warns banks to keep their expectations in check. "We always advise people that BPM is not a way to try to get rid of your assets right away -- it's not a rip and replace," he says. In addition, Garimella cautions, "Don't get bogged down in enterprise process modeling initiatives. ... Don't map processes just for the sake of mapping."

And, as with any major organizational change, there may be some resistance from longtime staff. For example, software developers may resist BPM initiatives because the process reuse removes much of the back-end coding from the application development process, says BB&T's Liles.

A BPM Center of Excellence

One of the best ways to ensure the success of BPM initiatives, experts agree, is to establish a BPM center of excellence to leverage investments in BPM technology. A BPM center of excellence, however, goes beyond the typical project management office (PMO).

SunTrust's Marks reports that the bank's PMO is not currently set up to deal with the BPM model of deployment, which is "iterative and agile," he says. To keep the project moving forward, Marks notes, he and his team, with support from CIO Tim Sullivan, had to educate the PMO on the basics of BPM deployments. "It helps that we had success from our first implementation," Marks says, adding that the bank currently is creating a specific BPM project management track.

According to Metastorm's Mooney, BPM centers of excellence are prevalent among large organizations, which tend to have more BPM initiatives in place than do smaller organizations. She estimates that about 10 percent to 20 percent of all organizations have created BPM centers of excellence, noting that the formation of BPM centers of excellence is driven by companies' desire to make sure there is a strong business case in place for BPM initiatives.

Those organizations that have established BPM centers of excellence experience greater success with their BPM initiatives, Forrester reports. According to the research firm's February BPM study, "The EA View: BPM Has Become Mainstream," almost half of all organizations that reported "clear and measurable benefits from their BPM efforts" had established a BPM center of excellence. In contrast, only 4 percent of those reporting "no BPM success" had a center of excellence in place. Forrester defines a center of excellence as "a formally appointed and documented body of knowledge and experience on a particular subject area with the goals of providing expertise, managing governance practices and supporting projects associated with the subject area."

According to BB&T's Liles, the bank has a small BPM center of excellence, but it's "not formal right now." All the members of the group, he says, are from the IT organization's integration services group. They typically evaluate projects at the initial stages, Liles explains.

Likewise, SunTrust's BPM center of excellence consists purely of IT staff, the bank's Marks says.

But, Forrester stresses, a BPM center of excellence should include representatives from the business as well as IT. The group also should include a process visionary, a BPM project manager, a BPM tool expert, domain project experts and an enterprise architect, Forrester says.

The result of all this governance is sustainable, long-term BPM success. Metastorm's Mooney notes that the core of BPM has shifted from a workflow focus to a focus on analytics and corporate governance. "There's more emphasis now on putting metrics in place and drilling out reporting," she explains.

BPM delivers the ability to measure results in detail, adds Gartner's Cohen. The real benefits of BPM, she says, include results that banks can benchmark and then tie to ROI. This allows banks to quickly build business cases for future projects, which tend to be shorter and more measurable.

"Success feeds additional successes," Metastorm's Mooney says. "It's a snowball effect."

Related

BPM MOVES BEYOND WORKFLOW business optimization

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