Club del BPM para la difusión, formación e intercambio de experiencias sobre el BPM y los BPMS

A quick look at today’s Business Process Management Suites shows how far the market has come. Some times even farther than industry imagination.

It started with Human Workflow, passing through BPM & BPMS, and leading to new concepts like SOA (complementary to BPM) or even beyond, the future, BPOA—Business Process Oriented Architecture.

We all know the key to success in the networked economy is the ability to perfectly integrate value chains. Those value chains are profitable and efficient when accurately orchestrated and automated through designed business processes. It’s not only provides best practices, but also, and most important—innovation, as a systematic business process. Innovation; to solve problems, optimize solutions, and create new value for society.

For everyone—IT and business professionals—we are now approaching the way of doing things easier. In the past years, a big challenge has been set by the experts; bridge the gap between Business and IT. All theses concepts and tools are running to reach this goal. But, like we said before, it is a never-ending process, and it keeps going.

The next lines tend to be an approach to what we call the evolution of innovation, and how the business process management philosophy is collaborating with it.

We will explore how system development technology and business models have traveled their paths until they finally came across this new model that optimizes the discoveries of the two sectors, allowing the fulfillment of a common objective; business readiness and flexibility.

Every time we figure the logical pattern underlying the functioning of businesses, there are two clear components worth highlighting; the idea itself and the implementation of such idea.

The idea is an integral part of the business spirit, of the creator, the entrepreneur, and it sets the direction for the business with a highly visionary focus. Its implementation is a part of the business management, and it is the key ingredient for the success of any idea.

We have many times overheard such phrases like, “Bring me a brilliant idea and I’ll give you some cents; bring me a successful way to implement it and I’ll give you millions.” In fact, there are many excellent ideas that have never attain the stage of implementation and many others turned out to be successful not really because of the concept itself, but because of the successful way they have been implemented. Today, we reach the conclusion that it is not the idea or the product itself that really matters; it is the way in which we make that idea or product satisfy our customer.

We will be focusing our analysis on this point, on the way in which organizations have attempted to implement the various ideas according to different world scenarios, and on the way technological innovation has contributed to this implementation.

The spectrum of our focus starts with tracing back to the first business models; the ones centered on classical theory. Men like Taylor1 have grounded their theory on operative efficiency and have directed their aim at the production area, stressing the entrepreneurial values of production, study and specialization standards of tasks, centralization, functional supervisions, and promotions based on production levels.

The prevalent paradigm in such organizations is the organizational chart; established from the division of work and further grouping of specialized tasks according to functional areas or departments. The classical concerns are the channels of authority, information and control, the lines of responsibility, authority and interpersonal relations are clearly drawn.

Coworkers are used to titles such as Vice-president, Management, Front Office or Department, yet processes are not established or defined and nobody knows what is done and how it is done throughout the whole company.

Managers are responsible for reporting to the Senior Management every issue relevant to an area or department, but no responsibility is assigned when it comes to the whole work, i.e., the process.

Once faced with these business needs, it is obvious that innovation would focus on computer systems that account for specific tasks within specific areas, aiming at increasing production and reducing resources use. Thus, the main features of innovation at this stage had to do with researching issues related to systems to perform high-speed calculations, with high performance and low-resource requirement computers, with systems for production line tasks automation, and so on.

Later, business models evolved towards the Organization Theories. At this stage, emphasis relies on the human resources, its relations and a functional structure that is more clearly outlined and consolidated.

Here, the importance lies on the proper operation of the inner company; the focus is placed upon the construction of a formal organization based on rational conducts aimed at achieving some goal. It is characterized by excessive formalities and paperwork; it is viewed as a closed and rigid system with high reluctance to change and depersonalization of relations.

Work groups emerge as an option for increasing efficiency in the problem-solving instance; this stage marks the beginning of the use of Departmental Workflows.

These first departmental workflows were limited to directing tasks and documents between employees of one area. Their four distinctive elements were:

Routes; they define the road though which objects (documents, forms, etc.) will flow. They indicate the probable paths the objects will travel.
Rules; they indicate who are to receive the information that flows over the routes. This process in known as object routing.
Roles; they indicate the functions to be performed, regardless of the individuals that perform them. Each role is assigned users and they are the ones that perform the tasks.
Processes; they comprise a series of steps (activities) based on existing routes and rules.

As evidenced, during these stages and until the eighties, most companies directed their efforts toward tasks that aimed at the correction and improvement of their production processes, seeking higher efficiency and productivity levels with rigid task specialization and functional structures.

This is why we witness how innovation was also encouraged to build computer systems on isolated grounds, developed to solve problems of a specific area, completely ignoring its relationship to the rest of the areas.

If we have spent years working toward the achievement of a higher efficiency of resources, the key issue would be which is the scarcest resource within our organization?

And the answer rises clearly; The Customer. It no longer points to technological resources, nor to facilities, but the key issue now points toward our customers who are, ultimately, the “pith and marrow” of the company.

Only now the management understands that it has been devoting lots of efforts to a mistaken focus point of the company. For many years we have directed our energy towards measuring, controlling, certifying and correcting our production processes. Consequently, processes within the company became the main cost factor for organizations. Let us pay attention to the fact that a strong sales strategy generates a higher impact of the customers’ perception of your company than many of the manufacturing activities. How many potential sales are lost because of a defectively designed sales process?

It is unchallengeable that the product we offer must be good, but it is also quite clear that a good product is not all our customers need. Our main goal should be the satisfaction of a customer’s need, by providing a good product and an associated service. We must not lose sight of the concept of quality that determines “that quality is on the perception the customer has over our product or service.”

Furthermore, this stage is signaled by significant changes in technology, new versions of operating systems, developments on word processors and PCs, higher speed servers, and so on.

So prominent is the dynamic development of these innovations that many companies have been tempted to “buying technology fashion-like” i.e., that most of them have not effectively analyzed the Return on Investment (ROI) of their IT investment, they just underwent the venture to achieve the state-of-the-art technology goal. By the time they started analyzing this factor, they realized that even though they have made strong investments on technology, systems and applications, they have not yet reached the expected benefits.

It is at this point that both business and technological fields came to realize that they should move forward toward some new model. The biggest opportunity they had to increase the company finance relied on the integration and optimization of the company’s processes so as to meet the customers’ needs.

A company is said to exist and be operative when it contributes some added value to the community (customers) it serves. With this background, it is evident and natural that those companies that use more resources than the ones they generate are doomed to extinction.

This question clarifies that the generation of value has a dynamic sense in which every single moment is an opportunity to modify our business logic in order to keep adding value for our customers. It is worth mentioning that this dynamic context speeds up as time goes by, thus the business lifecycle of our products or services is shortened daily.

It becomes evident that technological innovation has always had a leading role functioning as a catalyst by accelerating these changes.

The emergence of new information technologies, Internet and the whole computing world has contributed to the globalization process and engulfed companies with a new environment that is permanently changing the rules of the road. To face this, many companies have adopted a mix of two basic strategies;

Yet, becoming a really global company entails many more aspects than a broad portfolio of worldwide business units. In terms of efficiency and suitability to create value for customers, “the whole must be greater than the sum of its parts.” The key challenges now companies have to face are related to the establishment of the necessary infrastructure with partners, from financial networks to supply chains that will allow them to build an integrated value chain together, aiming at an optimized customer satisfaction. Once this is achieved, a global organization is sustainable.

The online connection of providing a big commercial, flexible and organized network accounts for the introduction of newly born services. This is not only an opportunity to improve customer service and substantially reduce paper and files movement, but also it sets precedent for the emergence of new businesses and for the maximization of a new sales model though business process automation and control between community partners.

Against this background, over the last few years, companies have discovered a new way to get things done, a new way of managing and molding business ideas into realities. This new way is what we now call Business Process Management.

If we analyze this theory from a business viewpoint, we can see it is characterized by a change in the way we perceive a company. Comparing and contrasting product-oriented and customer-oriented companies, we could highlight the following discrepancies:

Product-oriented companies	Customer-oriented companies
Employees are the main source of problem.	The process is the main problem to solve.
Companies have employees.	Companies are made up of people.
I have to do my work everyday.	I have to help get things done in the company everyday.
I need to know how to perform my tasks.	I need to know the position of my task within the process and how can I improve it.
We need to assess the performance of employees.	We need to assess the performance of the process.
If something is not working as expected, we change the employee.	If something is not working as expected, we modify the process.
There is always a better employee.	There is always a better process.
Motivate people.	Eliminate barriers.
Thoroughly control employees and their production levels.	Concern about the development of people and encourage their skills to improve processes.
I can trust no one; everything has to be controlled as many times as necessary.	We are all part of this.
Who made the mistake?	Which process or task allowed the mistake to occur?
Correct mistakes.	Reduce variation.
Tasks are oriented towards the inner operation of the company.	Processes are oriented towards customers.

Recently, companies have learnt to document and map their processes, to develop analysis techniques for the identification of bottle necks and unnecessary steps, applying quality standards and working on the continuous improvement circuit for processes as the basis for continuously improving the whole organization.

Evidently, this entrepreneurial change would clearly demand a new step forward from technology, existing systems should be innovated.

This is how the BPM (Business Process Management) concept originates—as the technology that allows business process automation. It is born as a promise of giving the organization the drive it needs in order to attain a continuous customer satisfaction.

The most significant value of BPM tool’s contribution to the organization is the reaction capacity it acquires when it is gifted with real-time visibility on an operative level. This visibility enables a more effective and faster reaction of the management when it comes across a problem or a business opportunity. It is based on eliminating the logics from systems and upgrading the system to a higher level in which they can be modified and adapted at a faster pace and with lower costs.

Yet... have these technological innovations been able to fulfill their promises? Have they been able to provide dynamism and flexibility for businesses to organizations?

We may assert that they have achieved many goals; they have standardized business operation, controlling and reducing its variations and, thus costs; they have included people as a part of the process; they have shifted the organization orientation towards customers, and so on. Yet, they have made no improvement as to giving the organization the speed and versatility to adjust itself to constant business changes; they have failed to get the desired results.

If we analyze the causes of such failure, we can spot many reasons, from resistance to change or lack of technologies mature enough to be implemented.

Beyond these causes, one of the main reasons is that process-supporting applications are still built up on a monolithic basis, they are created to give support to functional areas (as classical business models once required), but they are not prepared for quick adjustment in line with business processes. This creates a gap even when business processes are adjusted and implemented quickly. IT applications that are to provide support to them fall behind and delay the deployment of new businesses.

We see the story is repeated every time there is a new business requirement, a market opportunity or just a new adjustment to some change of rules or laws, the steps are:

Upon evaluation of these options, we can see the most proper one would be number one, yet it is rarely the case in our experience.

To reutilize already implemented functionalities implies a hard task, as these systems were not created to be integrated and are developed on a monolithic architecture with platforms and/or technologies that are incompatible among each other. Even when the connection is technically feasible, we must face the risk of tampering with a system that is operating smoothly.

This is why most of the times the selected option is number two. It is the easiest and fastest option, although it demands more development time but it is not, in the long run, the best choice. This typical choice made by the technological area brings about a negative outcome:

The functionality is replicated by all applications
Difficulty for migrating inner systems; when there are multiple connections among systems
Multiple points of failure when there is no integration strategy for different applications and when they are all interconnected, points of failure multiply. They can very easily interrupt the operation of all systems
Generally, this kind of model is not very scalable
The final obstacle is a poor response to change. Applications are still conceived of as independent islands

In short, the implementation of BPM technologies over this application development scheme loses their inherent flexibility and versatility. Applications become a restraint for quick implementation of business processes.

Here we become aware that at some point during the evolvement of a company, when business processes growth turns evident and, along with them the growth of the computer systems that support it, there appears the need for a quantum leap forward towards the Business Architecture concept.

This means taking process concepts and sketching, like an architect, a design in structures and layers to support those processes from strategic business levels to physical implementation levels.

The concept of Business Architecture entails several implications, but they all aim at the same goal; to determine an orderly way to provide every level within the company with a defined and clear workframe, an outline in which every player of the company is considered and in which every level participates, focusing on the processes and, finally, advocating business strategies and objectives.

What does this imply for technological areas within the organization? Actually, it means that they will no longer focus their concerns or aims on isolated applications or systems. On the contrary, they will be oriented towards providing support to the company’s business processes, which involves an IT attitude and culture deep change. The services-oriented concept is born from this.

When we begin analyzing the way in which a business process management solution is designed and implemented, we can spot the following phases:

These final stage services have been widely outsourced or subcontracted by companies. The key issue is that they have managed to run their business processes adding participants, increasing the value for customers and reducing times and costs (logistics, documents safekeeping, call centers, etc.). So, many phases of business processes are performed outside the organization that originates them.

When a company evaluates the provision or hiring of a service, it desires the following qualities:

IT architectures assimilate this idea from the business world and model it into the technological world by means of the SOA (Services Oriented Architecture) concept. Just like the areas of an organization (or an external organization) provide a service to execute the tasks within a process, SOA defines that each application should also provide services to execute the phases of a business process.

Services-Oriented Architecture is neither a technology nor something you can buy off-the-shelf. Instead, it is a paradigm, a change, an architectural concept. It is a new way of assembling an IT environment architecture that allows you to model the company as a group of services available on the network that can be reutilized by any business process with a minimal effort.

To achieve its goal, it organizes discrete functions from applications and transforms them into interoperable services (based on standards) that can be quickly combined and reused to satisfy the business needs.

From a more technical perspective, SOA promotes and facilitates certain characteristics desirable for every system:

Its coupling level is loose; its interfaces are clearly demarcated, the coupling level is reduced, so the implementation or modification of a service does not affect the other services or the users.
It improves development levels and facilitates testing; as each business function is developed as an independent service, the developer focuses attention on a concrete point, raising the productivity level.
It defines a security level; the definition of systems security levels can be established on the services layer.
It facilitates reutilization; the development of services that allows interoperability and which publishes their interfaces on the net thus encouraging their own reutilization as they offer users complete business functionalities that are easy to implement in any process.
It improves scalability and high availability; services are transparent regarding localization, a failure of an existing one can be easily solved by reallocation with no negative impact on production systems.
It enhances maintainability and facilitates monitoring and error detection; services have well-defined communication channels, it is easier to monitor them, timely detecting errors and failures.
It allows interoperability; as based on standard protocols, we can create services that interoperate regardless their platform or programming language.

A Corporate Architecture Paradigm must facilitate integration. SOA is set to change the way architecture is viewed, not only for isolated applications or systems, but for the company as a whole. Besides, it encourages the building of services rather than applications. These services will be in charge of publishing a well-defined functionality for the application or process that requires it.

Clearly, we could never reach these technological models without traveling the innovation path on systems communication and integration technologies. Tracing back, we can highlight the evolution pattern and assert that the melting of the following technologies served as the foundations for SOA:

Classical solutions used standards for messages and communication implementation; EDI and TCP, FTP, etc. The synchronous implementation of these solutions is harsh, networks are efficient though little versatile when it comes to changes.
Attempts like CORBA are far too advanced for current market maturity.
By its simplicity, SOAP (Simple Object Access Protocol) standard acquires great acceptance. It is mounted on XML success and has a widespread uptake among IT communities, so much so that messaging standards shift to an XML base.
WS (Web Service) perfects the idea of SOAP by orienting the whole architecture towards the exposition of the services on the Web.

Even so, a company is not just based on the execution of isolated services. Conversely, services must be coordinated by the organization’s management. This is the instance when BPM and SOA generate a synergism to attain paramount results.



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