Business process management: Banishing workflow demons

While business process management can be a boon to organisational productivity and efficiency, it is not without its barriers, as Jessica Twentyman discovered. Conquer these, and you are well on the way to a healthier, paper-free workflow system.

Until recently, IRCEM, a French insurance and pensions group, was experiencing significant problems in managing the vast amount of documents it needs to keep on its seven million policy holders. Staff at the company were spending too much time filing, searching for files and photocopying documents. Document storage costs were escalating and flood damage and ‘paper mites’ – a skin irritation caused by excessive amounts of paper dust – were a real threat to the long-term preservation of files. The details of policy holders that they held, meanwhile, had to be entered manually into IRCEM’s computer systems, a painstaking task for administrative staff and one that often resulted with data errors creeping in.

A radical rethink was required – and, as increasing numbers of companies worldwide are doing, IRCEM turned to business-process-management (BPM) technology for a solution. Having assessed a number of vendors, IRCEM selected BPM specialist Global 360, whose customers also include US bank Wells Fargo, cosmetics giant Revlon and French mail order retailer La Redoute.

The project involved the department responsible for industrial disablement and disability, which handles six different file types, including home-based employees, carers and child minders, and two in-house professions: file managers and liquidators.

Using Global 360 BPM tools, the different documents that make up a file are now grouped together and digitised. The system then recognises document type by identifying elements, such as customer name, social security number and postal code, in order to associate the file with a master document. The system then imports documents into an electronic document-management system (EDM), which routes documents to users using BPM technology so that they can be processed.

Employees in the group can now fully brief customers on the status of their medical-expenses claims the day after they are submitted, and have made significant strides forward in terms of productivity and efficiency. “Now, documents are pre-filed, better structured and more consistent, and this has helped us work in a new way,” says Stephanie Wallecamps, IRCEM division manager.

That was not without its challenges, she concedes. “The group had a long tradition of using paper, so users needed to be progressively trained for the change. But as a result, each member of staff works in the same way and data-entry errors have practically disappeared,” she says.

The BPM system in use, meanwhile, can track events and actions, reduce and control timelines and implement organisational changes immediately. It has done away with certain tasks such as manual filing and circulation of documents. Having extended the system to call-centre agents, IRCEM now finds that 70 per cent of calls are managed directly by the agents themselves, with no need for manager intervention.

Like the workflow systems that preceded it, BPM is a much-hyped technology that claims to solve many of the problems that organisations like IRCEM encounter when it comes to equipping employees with the information they need to perform their roles effectively.

Indeed, much of the BPM technology currently available has its roots in workflow. As a result, the differences between the two can on first glance be hard to define.

Essentially, workflow systems are typically concerned with the application-specific sequencing of activities according to pre-defined instruction sets. These activities typically involve both software-driven automated processes or people-driven manual activities.

As a result, workflow has been inextricably linked to two key technology areas since it first emerged in the early 1990s. First, to enterprise-resource planning (ERP) systems from suppliers such as SAP and PeopleSoft. These had limited workflow technologies hard-wired into them to enable the logical progression of processing tasks. Second, and arguably more importantly, as an add-on to document imaging and document-management technologies that enabled organisations to transform paper-based information into digital format and then route it according to business rules.

In recent years, however, the emphasis has shifted away from the document to the process itself. The ‘application-specific’ nature of workflow meant that it could typically only handle tasks that involve data and documents contained within a single IT system. And while that was adequate in the 1990s, when many companies were involved in end-to-end deployments of ERP systems that promised to handle every process in every department, from human relations to manufacturing, few if any organisations have in reality ended up with an organisation that runs on a single software package. The result is that they are forced to custom-build integration links between several disparate systems and the workflow system.

BPM, by contrast, is concerned with the definition, execution, management and analysis of business processes, defined independently of any single application. In fact, they enable users to capture and retrieve documents and data from other, disparate business systems. In a sense, then, BPM is a superset of workflow, differentiated by the ability to coordinate activities across multiple applications, which operates at an abstracted layer but from those applications.

In addition, BPM tools separate execution instructions from process flows. In this way, they are able to route electronic information according to process outcomes and targets. By contrast, since workflow systems are tied to single applications, they do not accommodate alternative means for completing the same task or achieving the same goal.

Take, for example, insurance company AXA Ireland. It used BPM technology from enterprise content-management company FileNet in its DARWIN project, which aimed to establish screen-based handling of insurance claims across all of the company’s product lines.

The FileNet Business Process Manager tool enables staff to process and settle claims without resorting to paper records, and files and monitors workloads, re-assigning or re-allocating work to individual employees where necessary. It also integrates the process of claims handling across AXA Ireland’s software and systems infrastructure, providing an accessible platform to the existing policy/claims-administration infrastructure, SOLUS, and desktop applications such as Microsoft Word, Microsoft Excel and Lotus Notes.

According to Padraic Mills, director of administration at AXA Ireland, “DARWIN is not a one-off project, but a basis for implementing a culture of continuous improvement within our organisation. FileNet’s technology is designed to manage business processes, which is exactly what we needed to meet our goals of increased operational efficiency and to shorten our customer response cycle,” he says. Within the first year of implementation, he adds, BPM had increased productivity by 200 per cent.”

It is that kind of flexibility that is driving interest in BPM technology and has led to a substantially increased adoption of BPM since 2003, according to Shashin Shah, a director in the technology practice of consulting company, Deloitte. Companies are using it to plan and build processes to comply with legislation; to meet requirements for auditing and planning; and to build new processes without having to change or replace underlying legacy systems – and returns are generally high on effective implementations. BPM has other advantages over workflow, too, says Gartner Group analyst Jim Sinur. “The workflow products of the mid-1990s had weak-flow design functionality, poor scalability and were isolated. BPM is supercharged workflow that has sophisticated flow design through process modelling and analysis,” he explains.

These modelling and analysis capabilities enable organisations to identify process inefficiencies – for example, where an incoming order is held up for a day or two before being sent to the manufacturing plant floor, while accountants check the credit status and recent sales history of the company that placed the order – and re-design processes accordingly.

In addition, BPM offers sophisticated event-state engines that enable users to monitor long-running business events and transactions and alert them when manual intervention is necessary. An event is just a signal that the internal data of at least one of the systems involved in the process has changed – a contact name has been updated, for example, or a new order has just arrived.

However, the attractions of this technology mean that too many companies rush headlong into BPM projects with “nothing more than a comprehensive set of tools and a good return on investment story”, according to Ken Vollmer, an analyst with Forrester Research. “While these are certainly two aspects that must be dealt with, failure to also effectively address cultural resistance and organisational desire can relegate even the best-intentioned BPM projects to the dustbin of failure,” he says.

Cultural resistance, says Vollmer, tends to be a ‘bottom-up’ phenomenon that occurs when people working in individual work groups sabotage improvement efforts due to resistance to change driven by fear of potential job losses. Organisational desire, meanwhile, is a ‘top-down’ process that relates to the willingness of the senior management team to forcefully drive process-improvement efforts throughout the organisation in the face of resistance to loss of management authority within the operating units.

For these reasons, it is important to create a sense of enthusiasm for BPM across the company as a whole.

“We’ve found that a best practice is to form a process-improvement team made up of key individuals from each of the functional areas involved in the process,” says Vollmer. “The team is chartered with analysing process bottlenecks, evaluating possible remedies and implementing corrective action. This results in a situation where the people with the deepest working knowledge of the process are the ones that end up ‘selling’ the improvements to the rest of the organisation.” Likewise, a strong senior-management commitment is a prerequisite. “The main issue is resistance to loss of management control within the functional units. Individual supervisors and managers perceive certain process- improvement efforts as reducing their authority over the part of the process for which they are responsible. Barriers that limit the effectiveness of the process team spring up, and improvements are limited by the lowest-level management structure,” says Vollmer.

Explaining to employees and managers alike some of the benefits that may be expected from the BPM implementation will go a long way in clearing those barriers. For employees, that may mean less filing, less photocopying and fewer calls from irate customers. For managers, that will be increased worker productivity, shorter cycle times and, with any luck, increased sales and reduced cost. For everyone concerned, it means a more efficient and healthy company. n

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Start with a quick win

The simplest way to win broad acceptance of a BPM project is to start with a high-impact pilot that can be delivered quickly to gain corporate and user buy-in, according to Ken Vollmer of Forrester Research. Organisations can ensure their BPM projects ‘hit home’ by:

Garnering executive champions
Include senior-level executives in the BPM pilot to win high-level support early. “Gaining a high-level sponsor for your BPM project is more crucial than for many other IT projects because changing business processes threatens most managers –particularly when the pilot targets a cross-functional process,” says Vollmer. Executive champions help evangelise the project throughout the company, he says, and quash resistance from line-of-business managers who fear losing control and from employees who fear losing their jobs.

Using process analytics for unexpected value
Through BPM reporting capabilities, some organisations have developed the ability to detect unusual events – such as a spike customer demand in a specific region – and reallocate more resources accordingly. “When evaluating BPM software, look for products that have strong reporting and analytics capabilities,” says Vollmer.

Keeping it flexible
“In the early days of workflow – the precursor to BPM – companies tried to predict every single step in a process because the tools could not accommodate change.

But turn that conventional wisdom upside down,” Vollmer advises. Now, he says, it is important to choose a product and design process models that accommodate change quickly, because business rules change much more frequently than process owners realise. “Ask the BPM vendors on your shortlist about their process discovery, process versioning, and change-management features, and make this a high priority when selecting vendors,” he says.