I had a dream . The dream was to map out all business processes in an organization, develop the run time from the process map, validate the function of the new run time and sun down all existing systems. It was a dream few years ago. I challenge myself, it is not a dream any more and we, as an industry, are moving towards it. We may not be there today to make it real but we are in the path of it.
Information technology is slowing becoming business technology and technology will become a black box managed by set of providers. Business technology management team will manage only set of providers but not technology in near future.
Leverage the centralized business process map to simulate/emulate any new business ideas
Validate the new business ideas for strong business case
Develop the application from the process map and launch it in PaaS (Platform as a service) like Google apps.
The first step of the phase #1 is to select the cost effective BPMS software. I do not need to amplify why it needs to be cost effective and economical option. Due to the global economical crisis, most of the organization is on the lights on mode, and minimum budget allocated for any discretionary spend for this year. Economical and cost effective alternatives are not differentiators in the competitive environment, it is a survival ingredient.
Business Process Management Suite (BPMS) is a set of tools truly enables the following key strategic objectives
Business – IT alignment
Time to market (Agile software development)
Process Efficiency – Foundation for Six Sigma
and lot more
If BPMS is in the technology road map and the organization is following the road map to move towards the vision, BPMS must be articulated to the executive management teams both in IT and business. The executive management teams may ask high level questions to understand how the BPMS fit in the organization landscape and how it will assist the organization to move towards the vision. When you deal with executive management team before you make them understand some concepts, ensure you erase the misconception they might already have. What BPMS can not do?
BPMS is going to replace all ERP like SAP, PeopleSoft?
BPMS will not replace the existing ERPs, portfolio systems. BPMS will stay top of it and orchestrate any new system development involving all key enterprise systems like ERP, portfolio
BPMS can be used for technology migration projects? Example, From database version 1 to version 2?
BPMS purpose is not to use technology migration project. First of all, BPMS can not add any value in the technology migration projects.
Few frequently asked question by the executive management team related to BPMS direction are listed below.
When to use it?
Use for a new system development if – the business processes changes frequently and they are core business processes, services provided by the new system can be used across different products, the requirements of the systems are relatively vague and would change frequently, involves multiple teams to complete the life cycle of the system function.
How to use it?
From get go, approach the BPMS will be used by both business and IT teams. Get the business teams involved from the beginning, engage them in the initial market research, selection & evaluation and financial commitments in procuring, establishing the foundation like infrastructure, competency centers. Bottom line, it should not be perceived as IT tool. It is a tool used by both business and IT team. How to use it? Capture all the business process flow, analyze the business processes, implement and manage it. All done in the same tool.
How the teams from IT and business work together? (particularly how the IT architects and business process designer work together)
The tool, methodology and approach brings both the IT and business teams (IT – Business alignment, partnership) together by design. The business team will be using the tool to document the business processes (for any project requirement), business analyst/consultants from both IT & business will analyze the business requirements using the tool (like simulation, identification of bottle necks etc), IT architects will build the connectors (to the ERP, Portfolio, enterprise database ware house), IT architects/consultants will auto build (code generation) the application using the tool, business analyst will using the same tool to perform business activity monitoring (let us say, the requirement is to build the credit decision engine and BAM will used to monitor the approval rate by state, product, type of loans etc)
What are the core competencies the IT organization must have to move in this direction?
Business consulting to business, innovation, business process management, business process modeling, business architecture, enterprise architecture, strategy, IT finance management, SLA management, vendor management, etc
How the development partners (like out sourcing partners) play a role in this setup?
Like any software system, the quality of the software systems are not guaranteed until verified/tested. Out sourcing partners can a play major role in verification (testing) of the newly build software system. They can play a role in building the connectors in BPMS. They can play a major role in maintaining the enterprise systems like SAP, PeopleSoft, CRM, etc They can play a role in assisting in capturing the business processes in the tool (the percentage should be very low in this category)
Business Rule Engine: Do you really need business rule engine? What is the purpose of the business rule engine?
Almost all the business applications have set of rules. To develop a business system to fulfill the business requirements, all the business rules are implemented in the systems. In a traditional model, all the rules are converted into programming language and in specific, turns into if then else constructs in the application. If the rule changes then the business systems are changed. Then,if then else constructs within the systems are changed. Some times the rules changes frequently and end up changing the applications frequently to meet the new rule requirements. The applications/systems directly implements the business rule engine becomes big monolithic applications. Over the time, it will become very complicated to maintain it.
Why monolithic applications are difficult to maintain?
Let me explain why monolithic applications will become difficult and complicated over the time. Let us take a financial institution like bank who is in the business of providing loans and leases to consumers to buy recreational vehicles in United States. Loan (retail) and lease has different set of business rules. For lease, the vehicles are returned to the financial institution (lessor) and it is up to the lessor to re-market (resale) the RV. The lessor need to estimate the residual value of the vehicle at the beginning of the lease and based on it, the monthly payment and taxes are calculated. Money factor determines the interest rate banks charge on the lease account. Each state has a tax, legal, regulatory requirements and it changes.
Retail loan (in India, the retail loan product is called hire purchase, and I had developed a financial accounting package for hire purchase companies using FoxPro in 1993. The concept is same in United States) are relatively straight forward comparing to the lease. Loan amount, interest rate, initial payment, duration of the loan, sales tax, surcharges (as per the federal & state laws), and base on those parameters, it is a simple interest calculation.
In the above scenario, the state law, taxes, surcharges, residual value, money factor, credit quality, product type, loan type, loan duration, lease type, lease duration, and etc are the factors plays a role in customer inquiry, contract origination, contract validation, contract management, and asset disposal steps of retail loan or lease business processes. There are numerous combination of business rules based on these factors are formed to implement the major steps of the business processes.
Implementing these steps in the application directly will become difficult to manage and each time there is a change in those factors, the applications in the bank landscape need to change and under go the software development life cycle. It is costly, time consuming and limits agility, flexibility, adaptability
It is ideal to implement the business rules of the business application in a business rule engine and manage it independently of the application. It provides a platform to the business customer to change the business rules directly with out involving the information technology department. Also the tax, state regulation, internal business rules (like if the credit quality is medium .and. if the financial product is lease .and. if the state is new york then the money factor = 0.00000012) will be reused across application in the landscape.
The another major technical advantage of using the business rules is optimizing the business rules. It is very similar to Karnaugh map in boolean algebra. The rules will optimized by the business rule engine.
Are you already using business rule engine in your IT shop or is the business rule engine is part of your technology road map?
Business Process Management Suite tool is not an IT tool. It is a tool must be used by both business and IT. It is a platform to bring both IT and business together. IT – Business alignment has been a topic for a while in the enterprise and IT strategy related discussion for a while. The true IT business alignment in the grass root level can be accomplished by selecting and implementing the BPMS tool in an organization.
Like innovation, agility is an another strategic imperatives being used by many successful organization. To accommodate the rapid change in the market, the agility within the IT organization in terms of technology, process, systems and etc are must have. It is not a good/best practice it is must have requirement in this dynamic market.
Who are the real users of the tool?
When the tool is viewed as an IT tool, then it is the starting point to defeat the whole purpose of the tool. BPMS is not an IT tool. It is an enterprise too which should be used by both IT and business. Generally, the business process management of the organization is maintained by non IT organization. Some of the organization has a centralized organization responsible for the business process management. They facilitate the business process for any new project requirement and also maintain the process house of the organization. It is a centralized business team to perform this function.
To summarize, the BPMS is not an IT tool and should be used by the following teams to make the BPMS implementation successful.
BPM team (a centralized business facilitation team responsible to map a business for new requirement and maintain the process house of the organization)
Business teams (cross functional)
IT application architecture team
IT enterprise architecture team
Executive Business analyst (who work for CEO or COO and provide the necessary business information working with the functional areas)
Business Process Management (BPM) brings agility, adaptability and flexibility to an organization. It is a discipline within the organization how the business processes are defined and managed. All the profit organization does provide value to the customers by selling a product or service. The steps involved in providing that value requires a sequence of steps and systematic way of documenting those steps and managing it is called the business process management. It applies to financial services, insurances, credit card, retail, bank etc. Documenting the business process and managing it has been followed for almost 20-25 years. Started from the flow chart to state interaction diagram, sequence diagram. Documenting it before the implementation is not a new concept.
The real problem in the BPM and the IT system implementation are the variance between the documented processes and system implementation. Over the time the variance between the two increases significantly. The higher variance has a compliance and quality issues.
Systematically keeping it in sync all the time is a new concept.
In a very very high level, Business Process Management Suite (BPMS) is a set of tools to design the business processes and automatically develop the code for the defined business processes and deploy into the environment.
There are various products available in this space. IBM Websphere Process server, PegaSystems etc.
Any one who has worked or working with Pegasystems tools for BPMS implementation, do you think you made the right choice of selecting pegasystems as your BPMS tool. I request you to comment your experience and thoughts related to time to implement, time to delivery, benefits, pricing, ease of implementation, complexity, business team adaption , skill set, required competency and etc.