Build a Proven Roadmap to Greater Business Agility

Build a Proven Roadmap to Greater Business Agility

The Modern Enterprise is a Network of Complex Interactions Customers Customers E-Banking Business International Bank Branch Site ATM Customers Internal Employees Customers ATM Government Oversight Commercial Finance LOB Home Mtg LOB 3 rd Party Services Services LOB Payment Service Providers Commercial Customers Branch Site Underwriting 3 rd Party Services Mortgage providers Legal Services Outsourced service providers 2

SOA and BPM provide the foundation for business agility BPM engages the business in continuous process improvement to flexibly automate a wide-range of business process, from the human-centric and adhoc to the more documented and structured SOA helps make the underlying technology that supports the business less rigid and more agile by integrating the business through linked, repeatable business tasks, and services 3

Further improve business performance by combining operating model changes with enhanced flexibility and intelligence. Increase awareness by capturing relevant internal and external events Customer Issue Resolution Competitor Introduces New Product Improve decision making through a better understanding of business conditions Supplier Pricing Trends Changing Customer Buying Patterns Customers Abandon Shopping Carts Deliver greater flexibility and control over and measurement of business activities Introduce Promotional Product Offers 4

Successful Organizations are Charting Their Roadmap to Agility Business Outcomes Assess Your Business 1 Objectives Complete an initial project in 2 90 days or less 3Advance to Higher Value Extend and enhance process improvements Accelerate change Integrate with customers, suppliers and partners Define and automate a business process Integrate a core system with a partner application Deliver new services Manage and scale workloads in the cloud Control costs and add flexibility Virtualize an application Project Scope 5

And infusing their business activities with points of agility Events Analytics Collaboration Rules Content Monitoring Predictive Analytics Analyze 18-24 year old customer segment to determine the likelihood of campaign response Product Manager Marketing Manager VP of Marketing Customer Define Marketing Strategy Define Rules If prepaid balance is less than 25%, send offer to load 1000 mins and get 10 mins free Identify Target Customers and Offering Create Campaign Collaborative Process Improvement Add SMS as a new delivery channel to the campaign delivery process Approve Campaign Execute Campaign Dynamically Update Rules If subscriber spends $5 in 1 week on mobile browsing, then receive 5 free SMSs Monitor key KPIs Sales increase % due to loyal customers % of sales lost Events If campaign promotion target is not met, send real-time alerts to market managers and VPs Delivery Channel Monitor & Evaluate Campaign 6

Process is everywhere Account Opening Campaign Management Vendor Onboarding Claims Processing Order Fulfillment Customer Problem Handling 7

Business challenges at Lincoln Trust Company Leading independent provider of trust and custodial services with the ability to administer individual and corporate retirement accounts holding traditional and alternative assets Paper overload 100,000+ client requests per month each generating a paper-based process instance Poor IT-business relationship Knew paper problem was a process problem but limited IT/Business collaboration prevented improvement 8

Partnering for process improvement Lincoln Trust developed an aligned process focus across the company Joint LOB-IT executive steering committee and a small BPM team developed a 2-part strategy for process improvement: 1 2 Quickly address key pain point Business-led automation for full business processes Common shared process for document imaging and automation using content management tools Removed physical paper from 145 company processes Business teams created as-is and to-be process models using BPM Blueprint IT teams implemented automated workflows for 15 processes including service requests, plan establishment, and distributions 9

Process improvement at work in Lincoln Trust BPM technology integrated with key enterprise capabilities Screen Pop (CRM) Portal Web Applications WLE Coaches Front-end Applications Web Services WLE Web Services WLE Processes BI / Reporting Services Business Process Management Suite Reporting ODS View BPM View Operational Data Store System of Record WLE Database Enterprise Data Architecture WebSphere Lombardi Edition 10

Best practices from Lincoln Trust Rich teaming between business and IT drives process improvement Best Practices Build a partnership between business and IT Focus on business value be willing to trade-off for an initial project Include process analysis skills on BPM teams, but don t over-analyze Results $2.2 million in savings to date 120% ROI in one year 25% increase in employee productivity 50% - 75% reduction in cycle times 11

Accelerate process improvement with decision automation Rapidly implement changes to meet market needs and competitive threats Increase straight-through processing Reuse decision logic across processes and systems Ensure compliance with business policies and external regulations 12

Decision automation at North American rail carrier Improved response to maintenance issues is critical for avoiding derailments Complex Rail Network 8.5+ million carloads of freight per year 32,000 mile rail network Serve 28 U.S. states, 2 Canadian provinces, 40 ports, and 32 inter-modal facilities Difficulties effectively leveraging data Multiple types of detectors installed throughout the rail network Data from detectors stored in multiple locations and correlated manually Handling new data types and developing alert rules required significant effort and time 13

Project objectives Composite Alarms project focused on improving data use and increasing flexibility Systemic Analysis Analyze data from multiple detectors and trigger alarms more proactively Predict potential future problems Increase alarm accuracy More Flexible Systems Easily change rules-based decision logic and add new detection and alarm data types Increased Automation Minimize manual correlation of alarms Enforce consistent evaluation of alarms Trigger maintenance processes to expedite rail car repairs for non-critical alarms 14 14

Facilitating Change with BRMS Where Business Rules Exist Business Rule Management System User Tools Rules are Defined, Analyzed and Maintained Applications Documents Rules are Managed and Stored Rule Repository People Processes Rule Execution Server Rules are Deployed, Executed and Monitored 15

Benefits of decision automation Composite Alarms project delivers powerful business results Measured Metric 2007 (pre-project) 2008 2009 (post-project) 2008-2009 % Change Rail Carrier s Transport Volume (millions of train cars) 10.318 9.994 8.418-15.8% Rail Carrier s Incidents (number of incidents) 483 464 314-32.3% Carrier s Avg Train Car Miles/Day 198.2 207.1 230 11.1% Incidents decreased at 2x the rate of freight volume reductions Freight transport efficiency increased Fewer accidents = reduced costs from repairs and penalties Detection alarm rules can be easily added, revised and governed 16

Process participants span organizational boundaries Dynamic, seamless connectivity is key Service Customers Partners Investors Providers others Transport Healthcare Finance Insurance 17

An agile, connected enterprise delivers strong results Triple-S (Blue Cross Blue Shield of Puerto Rico) leading and largest health insurance company in Puerto Rico, the first to offer a health plan with an open network Customer Pain Barrier to business expansion strategy: propriety, legacy system 0% reuse across functional areas Real Results Significant decrease in time to implement new products and benefits SOA based, supporting coexistence of and reuse across new and legacy systems, including extensions to business partners 18

Start simple. Start strategic. Strategic assessment yielded the following prescriptive steps: Implement partner solution for core system replacement Develop an SOA transformation strategy & select vendor Implement application strategy and SOA transformation Develop PMO Framework and Processes Project Kickoff Clarify Business Vision and Strategy Perform Current System Assessment Perform Vendor System Assessment Conduct Gap Analysis Develop Application Strategy Deliver Final Reports 8 Step Strategic Assessment 19

Consider multiple implementation techniques Implement partner solution for core system replacement Complete re-write would take years Many sub-systems still provide good functionality QXNT packaged healthcare application was selected Sometimes the best approach isn t the in-house approach 20

Maximize service reuse with SOA Go To this. from this Phone Web Provider Management Customer Service Medical Policy Management Claims Core System Membership & Enrollment Benefits Sales & Marketing Billing & Admin 21 Data Warehouse

as you grow to full scale External Consumer Systems WebSphere TX Trading Manager WebSphere Service Registry & Repository System z WebSphere ESB Other Provider Systems WebSphere Process Server Internal Consumer Systems WebSphere Business Monitor DataPower XI50 WebSphere TX Launcher Medical Policy Management Claims Core System IBM offers unparalleled expertise and level of investment Membership & Enrollment Benefits 22

Take it one step at a time Phase 1: Requirements Analysis Phase 2: Design and Implementation Project Definition Workshop ESB Architecture Design Workshop Project Charter and Architecture Guide Organization and Support Guide Requirements and Design Doc Project Plan Infrastructure deployment Testing and Support Governance and Monitoring IBM Software Services for WebSphere (ISSW) was key [to] success of this implementation 23

Start building your roadmap Leverage IBM s expertise and proven methodology to replicate the successes you ve seen today 1 2 3 value Assess your business objectives Complete an initial project in 90 days or less Advance to higher Cross-functional team identified key projects and developed process improvement strategy Implemented initial project to remove paper from key processes Business-led process improvement and automation implemented for 15 processes Conducted a discovery workshop to examine the use case and determine next steps Leveraged ISSW workshops to get started with service enabling existing legacy applications Leveraged Quick Win Pilot services to implement an initial solution in 10 weeks Reduced point-to-point connections by connecting service enabled assets via an ESB Trained on best practices for rule governance Future: extend security to applications deployed in public and private clouds 24

Will You Meet the Challenge? Can You: Identify a process or decision area that needs to be optimized? Quickly integrate a new component of your dynamic business network? 25

IBM will deliver business agility to drive better outcomes for our clients through A technology foundation that integrates SOA, BPM, business events, business rules, and analytics Solution accelerators for key business processes Services offerings backed by a Center of Excellence driving thought leadership, assets, and best practices 26