BPM

Whether you're in a clothing store, a car dealership, or a bank's online catalog looking for low-interest loans, you're more liable to buy if you get some personal attention. You want someone to answer your questions in real time.

The trick for companies doing business online is to provide customers with the same feeling of personal attention that they would get on the shop floor. But since there is no highly experienced sales person sitting next to you when you go online to buy a DVD player, companies need to create the illusion of a seasoned salesperson by setting up systems to respond immediately to your questions and concerns. Any delays or gaps in information likely result in an abandoned shopping cart.

Customer relationship management (CRM) and hard-wired enterprise application integration (EAI) tools were initial steps to solving the problem. With great effort, they connected some customer-facing systems in an attempt to create this virtual salesperson. The result was more like an inexperienced salesperson who might be able to tell you, in time, how much different DVD players cost, but not what you get when you pay for the more expensive model. Delivering the kind of "personalized" experience that customers expect from either a real or virtual salesperson requires seamlessly integrating internal systems.

Seamless integration requires XML in order to create a lingua franca between previously siloed business systems. Suddenly, common objects for "Trade" and "Address" mean the same thing in the CRM, enterprise resource planning (ERP), and other systems. But generating such a common language in XML is only the first step. Companies need to establish the framework for using that common language to create processes that deliver the information to the right person at the right time. A business process management (BPM) approach can help companies integrate core business systems at the process level, based on an XML framework for correlating data.

Such an integrated system allows product managers to change strategies on the fly to address shifting market tastes. It ensures that sales managers can constantly tweak sales strategies to handle new targeted marketing programs. It also gives service representatives instant access to customer information to deliver the best care possible. Moreover, it gives companies the tools to automatically generate business processes that increase an organization's chance of closing the sale.

Smart Customer Handoffs
Despite the desire to automate many processes, many call centers still field calls from customers who could not complete online processes. Unfortunately, the customer often has to start over with the call center representative, wasting valuable call center time and creating the perception of bad customer service. Managing the "handoff" from the online to the offline experience better can provide significant cost benefits by reducing call center time.

Making this handoff smarter requires integration. However, integration's well-known cost and complexity have scared many organizations into thinking that the difficulty of making the online and offline worlds function seamlessly is greater than the perceived benefits. New approaches to integration and technology, however, have changed the balance.

Traditionally, CIOs have had two ways to support the kind of requirements described above. First, they could write a lot of custom program code. However, code is extremely hard to change once written. That means that someone would have to query users to determine what they want the system to do prior to writing code. The cost for this type of approach is significant, which means that most CEOs will demand a detailed ROI with a 12-month payback schedule. Most of the cost of custom coding is due to two factors:

• Initial code must come very close to requirements, and requirements must be very specific, since it is expensive to go back and change after the fact.
• IT resources must be made available on an ongoing basis to troubleshoot, modify, and upgrade the code.

The second approach is that of data integration. By creating a common database, users and applications can share information and coordinate activity. This, too, is very expensive because it requires complex architecture efforts, as well as ongoing maintenance that involves refreshing data. Data integration's cost stems from multiple factors:

• Much of the cost is infrastructure to move and store data for potential (not known actual use) future use by application. That means most of the data is there for insurance purposes, and probably 20% of the data is accessed 80% of the time.
• Modifying business processes usually requires architectural rework, which drives up maintenance costs.
• The level of granularity of the data (i.e., do we need transaction-level data or just summarized data of monthly transactions?), and the latency of data (how often do I need to refresh it?) drive key cost decisions - decisions typically made data element by data element.
• The cost of having IT staff hide the complexity of the physical data's appearance from the end user who can't understand table layouts, etc., also plays a role.

It is not surprising, then, that when faced with requirements to be more agile (i.e., view change as necessary and good instead of costly and undesirable), the impracticality of these approaches rises to the surface.

Many end users, analysts, and vendors have reached the same conclusion - for the types of requirements emerging today in support of business imperatives, a new approach is necessary.

Integration and Automation with BPM
This new approach is business process management (BPM), and it relies heavily on new standards emerging in the form of XML and Web services to overcome the difficulties in prior generations of integration technology. The advent of these components enables a higher degree of automation and reusability than ever before.

BPM coordinates the actions of isolated IT systems - both online and offline. Using the built-in intelligence of existing applications and systems, BPM can help companies nimbly react to key business events and capture millions of dollars in potentially missed revenue opportunities while improving customer service.

BPM technology overcomes the weaknesses of the current generation of systems integration approaches.

It provides a variable cost model that allows for a small initial implementation footprint tied to a three- to six-month payback period, tightly coupling investment and return. Today, technology must prove utility before vendors demand license and support fees. Instead of the typical 12-plus month implementation and two-year payback model, BPM technology scales deployment efforts to initial requirements. As a company extends its BPM implementation over time, it builds upon work already performed.

BPM allows for rapid modification so end users can engage in "test-and-learn" process development and management. Most of the processes that support key business drivers are complex and must continuously evolve in response to internal and external changes. BPM technology enables users to implement, test, modify, and re-implement processes in rapid sequence based on what they've learned.

BPM gives end users more involvement, so they can change processes on the fly and improve agility and productivity without having to call IT. The current generation of technologies is brittle largely because IT shoulders the bulk of maintenance costs and responsibilities. BPM technology balances the workload between the end user and IT in such a way that users can maintain processes without resorting to IT support.

Companies benefit from BPM's ability to reuse common data objects such as "Customer" and "Trade" and use open standards to make them available to any application. The complex infrastructure many organizations operate has evolved from proprietary database structures and application logic syntaxes of years of systems development. Most valuable components of business processes, including data definitions, business rules, and transformation logic, are replicated in a variety of formats across the enterprise. BPM technology relies on an object model that exposes and abstracts these elements so that they may be reused across different systems via emerging XML standards.

BPM provides context for business process to allow users to access information at the application level, before it has been saved to a database, dramatically reducing data integration. Most traditional application integration is based upon the movement of "state data,"or data that has been saved about a particular event. State data is stored in databases, and then "synchronized" with other databases linked to other applications. But companies don't save much information needed to support business rules because it is too expensive or too complex.

Companies can use BPM to cultivate existing business logic and integration capabilities to connect existing applications and databases without modifying them. Most of these systems already have connections built into them, either with middleware or published application programming interfaces (APIs). BPM technology uses these connections to link databases and applications while providing a layer of abstraction that hides variability between systems.

Finally, BPM automates many integration tasks that previously required additional code or manual configuration. For example, if a business process reaches a decision point and needs to know whether a given customer is "high" or "medium" value, programmers typically need to manually code the "fetching" of that data. Today's BPM technology can automatically provision information "just in time" based on instructions provided by the user at the metadata layer. This allows the BPM server to automatically get that information without a user having to specifically say "time to go get customer lifetime value." This feature is especially powerful in dynamic environments where processes may change, resulting in much manual rework of data fetching steps without it.

Gartner estimates that 75-80% of all integration projects are done with custom code. Despite integration technology's nearly decade-long evolution, it is still not a practical solution for most companies. As businesses evolve, brittleness must give way to agility in how systems support emerging business requirements. By taking a fresh look at integration from the process perspective, BPM technology has the potential to dramatically reduce the cost and effort involved with integration, generating tremendous benefits to both businesses and their customers.

Ensuring quality customer experiences online or in person means delivering the right data at the right time to the right person, whether it's a salesperson, a service representative, or the customer via self-service online. Using XML as its foundation, BPM provides the smooth integration of different systems to ensure that necessary data is available instantaneously to those who need it. It gives companies the tools to start converting undecided customers into those who are willing to commit, and thus bringing more revenue into the company.