Link and go with BPM: business process management systems grow up, get relevant, and promise...

Technology for business process management (BPM) is one of those regrettably gettable technologies that seems self-explanatory but tends to inspire a confused recognition. ("It manages business process, right?")

Many have heard of the niche by now or experimented with it, think they

Or, a project team is so fixated on getting the business problem off its spine, on time, under budget, that a concept of how the work might be done better dissolves into misstated geek speak with business people replying, "whatever." Compounding the resistance and misunderstanding is the fact that efficiency-seeking projects require cross-functional and cross-departmental application and database linkages--inherently a more complex situation.

IT talent can contribute to mixed-up definitions or mixed results at a given bank, because technical personnel with a stake in traditional development will often claim that simple workflow tools or Java development can get the job done when those technologies can't.

Vendors always do their part. "Whenever a niche gets hot, you'll have everyone leaping in, claiming they do it, too," says one BPM company executive.

Although business process management incorporates workflow and can be built using a services oriented architecture (SOA) design, it is a more advanced level of automation and shouldn't be confused with either. Meanwhile the BPM space is in transition with new market entrants, vendor consolidation, and development of new capabilities.

In a 2004 note, Giga Research broke down BPM vendors into five categories: application integration, application platform, pure play, enterprise application, and enterprise content management, leaving the impression that specialized scenarios often came into play and directed what the "plumbing" looked like.

Little wonder then, say experts, that results sometimes fall short, leaving many none the wiser.

Defining process first

Beyond Giga's categories and a similarity to workflow, what is BPM about? In terms of technology, it involves a blending of machine-to-machine and human-to-machine connections to get a job done.

To really appreciate the nuances, however, you have to hone in on a more detailed sense of process. In a 2004 white paper written by Fuego, a pure-play BPM vendor based in Plano, Tex., process was defined as "organized work performed by more than one person, system, or organization and completed according to a set of procedural rules and dynamic human interactions."

"Initially, BPM developed out of business process re-engineering and was a paper or whiteboard-based improvement discipline," says Fred Dillman, chief techology officer, Unisys, Bluebell, Pa. "Now there is a new level of sophistication with these projects," he says, "in part, because you have tools that can simulate process and help to 'operationalize' it.

"More vendors and users are thinking of BPM tools in a lifecycle context, so that once a project is up and running, there is a measurement against initially defined objectives," Dillman adds.

Timing has changed. "You don't do a 'big blow out' style of project that takes years to finish and is out of date upon completion," says Dillman. "There is a monitoring that goes on after the initial development and an understanding that process redesign is iterative--it will change to keep pace with new business goals."

In the marketplace in various forms for a decade or more, BPM is evolving, supporting interconnection and smarter or streamlined linkages. Data, forms, and other related materials move with programmed intent as a case file l"en route to completion," traversing an efficient path from department to department and leaving an intelligent trail in its wake.

Moreover, BPM as practiced today is a tidy abstraction, a separation of process logic from application logic in order to build better process flow, says Michael Beckley, co-founder of Appian, Vienna, Va., which Forrester recently named leader in human centric BPM.

Connecting many different "dots"

At the same time, a small but sturdily growing fan base has appreciation for what the category can accomplish. "In the last year or so, understanding has shot up significantly," says Willy Fox, director of financial frameworks, for Pegasystems, Cambridge, Mass.

Demand reflects this. The global market for pure play BPM is $712 million scheduled to grow to $1.52 billion by 2008, according to Gartner. Today, less than 10% of enterprise processes are integrated into a dynamic framework that allows any company to respond to changing market conditions, according to AMR Research, Boston. This is a deficit that maturing BPM is said to overcome, which may be why, in the last 15 months, more banks are keen to know the technology.

"Modern BPM offers a flexible, intuitive user interface, application integration, and a better way to create straight-through processing transactions in a firm from the front office to the back," says Pegasystem's Fox.

BPM is getting known outside of IT circles and lets everyone have a hand in process design. "Appian's tools allow IT and business to collaborate in new ways," says Kevin Spurway, vice-president of marketing and solutions. "It's less about the business person developing the specifications, handing them off in order for the IT person to code it and create the test environment separately."

In a bank, BPM can incorporate specialized applications, such as loan origination and marry it to horizontal applications like spreadsheets and e-mail.

Specialists can step in or take over when exceptions require it, or can be incorporated in certain steps as a standard matter. If key actions need to be taken to get an account rebalanced, rules would trigger appropriate steps. Loan processing, new account opening, as well as standard business functions such as travel procurementare ideal candidates for BPM treatment.

Within the last few years some notable work has been completed as a new generation of vendors have made gains in the marketplace: Bank of America has implemented a fraud detection solution using a solution by Savvion; Wells Fargo has streamlined and upgraded its lending environment with BPM tools from Global360; and ABN Amro worked with Tibco to use BPM to streamline various back-office applications.

Compliance help

As the BofA project shows, compliance can be helped by BPM. In fact, it is a key driver.

In a webcast, Hank Barnes, vice-president of marketing and product management for business process vendor Ultimus, Cary, N.C., states that "increasingly, these projects are viewed as lower risk than traditional application development with a superior return on investment." Barnes' remarks and other BPM content can be found at www.ultimus.com.

Improved reporting for Sarbanes-Oxley and fraud-scanning work for anti-money laundering programs are naturals for the straight-through processing that a solid BPM deployment can create.

Alan Horton-Bentley, director of worldwide marketing with Filenet, is also a compliance expert, formerly with RegCom. In a recent interview with ABABJ (see Dialogue, at right), Horton-Bentley pointed out that banks were looking for ways to consolidate compliance management.

"It doesn't make sense to tackle each new piece of regulation as distinct and build a separate application environment," he says. "It's better to reuse common databases and take the sort of systematic approach that BPM offers."

Set up correctly, a BPM project could also help managers keep an eye on what they don't directly touch.

"A supervisor working with our system would be able to see how a set of processes were conducted," says Pat Morrissey, senior vice-president, Savvion, Santa Clara, Calif.

"The transaction data would be visible, right there in the browser--who got involved early, which branch managers authorized what process step, and what actions had taken place. You'd have a well documented audit."

Additionally, says Morrissey, if a bank feared a brewing fraud scenario and senior management suspected that, at a certain branch, insiders were involved, special reports could be created that would allow the situation to be monitored.

"Senior management would get a window in," says Morrissey, of his technology's advantages.

"Branch personnel would have no way of knowing that their process is being scrutinized."

Practical appeal

While it's niftiness as a concept might explain part of BPM's appeal, its ruthless practicality is at the heart of it. "This is occurring at a time when firms are trying to crack long standing efficiency barriers, says Trevor Naidoo, managing director, BPM, for IDS-Scheer, U.S., Berwyn, Pa, which has partnered with SAP on implementations and recently announced a partnership with rules vendor, Corticon Technologies, Redwood City, Calif.

"We cut our teeth in the manufacturing sector, which was really the first to develop such an advanced process discipline," says Naidoo. "Since then, other industries have been catching up and doing interesting things."

One reason for this, points out Naidoo, is that business process needs to be more agile, more easily changeable.

After conducting more general IT cost-cutting moves (i.e., server consolidation), re-evaluation of processes to achieve efficiencies is typically a next step, experts say.

The process analysis aspect of BPM makes it useful in other ways. Dillman, of Unisys, indicated that BPM automation is often done as part of an outsourcing arrangement, where process mapping and automation is part of the set up. IDS-Scheer's Naidoo says BPM can, in effect, create accountability among outsource partners by creating a performance environment for some types of BPO outsourcing arrangements. (For more on outsourcing, see feature beginning on p. 38.)

Process definition is at the heart of BPM. In fact, Morrissey's firm insists on business process definition as a first step and even gives away a tool in order for would-be customers to go through the exercise by themselves, at least initially.

Such is the wide ranging look and feel of BPM in 2006, as the market has matured and gone from "BP what?" to indispensably relevant.

"We've moved beyond a nuts and bolts discussion of tech plumbing," Naidoo says. "It puts a greater awareness on the processes themselves."

Term Talk

BPM Software--Tools that model, automate, execute, and monitor business processes from beginning to end by connecting people to people, applications to applications, and people to applications.

BPM Suite--Technology that delivers a variety of process, knowledge, and analytics functionality in a unified package, enabling organizations to quickly and efficiently build composite process applications.

BPM System--A management practice that provides for governance of a business's process environment toward the goal of improving agility and operational performance.

Source: Gartner

By Lauren Bielski, senior editor