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Business Process Management

January 2008

Business Process Management with

a Competitive Edge

Implementing Transparent, Agile

and Consistent Business Process

Management



Business Process Management with a Competitive Edge

Implementing Transparent, Agile and Consistent Business Process Management

Page 2

Automating business processes is not the current IT trend or marketing buzz in

the software industry. Rather, it is a fundamental strategy employed by those who

plan to stay in the game in the long run. It is what allows companies to remain

competitive by reducing cycle time in business value development, delivery and

support.

According to Forrester, “The confluence of several strategic business issues is

accelerating the high level of interest in BPMS software.” Specifically:

• A growing number of companies are realigning functional managers to

become cross-functional process owners, implementing Six Sigma and lean

manufacturing quality initiatives to improve business processes and shifting

their focus from applications to business processes supported by composite

applications.

• Compliance mandates such as Sarbanes-Oxley, Basel II, and the Health

Insurance Portability and Accountability Act (HIPAA), where BPMS tools

provide the framework to ensure required procedures are adhered to.

• Advanced BPMS tools empower authorized business users and managers to

model and monitor business processes and modify business rules.

In the pursuit of business process improvement, companies face important

challenges such as being able to better understand the behavior of their business

processes, being able to adapt business processes in a timely fashion, and

ensure the consistency across the enterprise.

• Total business insight

• Total business agility

• Total business process consistency

The benefits of implementing Business Process Management, or BPM, with IBM

Enterprise Content Management are significant, quantifiable and reach across theentire organization touching on all elements of the business. The reduced cycle

times and enhanced visibility into what stage of the process is in play, who is taking

action, the status of approvals and what hurdles must be overcome result in:

• Reduced operational cost

• Reduced risk in regulatory compliance

• Improved management oversight capabilities

“ Forrester believes the

shift from functional

alignment to business

process ownership willincrease corporate

performance, and the

adoption of BPMS will

drive a fundamental

and positive change in

the relationship between

business and IT.”

– Forrester





Page 3

Until now, business process improvement practices have either removed human-intervention as much as possible and focused

resources on exception processing or simply automated as many business decisions as possible. While both approaches are

valid, the outcome can vary substantially based on how you automate the decisions in your processes. If you don’t pay attention

to the “how,” you are likely to significantly limit your improvement options, resulting in reduced visibility, limited agility and a lack

of consistency.

Businesses can approach automating the decision logic of their business processes a number of ways. Let’s review the differen

options on how to automate decisions and how they impact overall process efficiency.

Traditional Software Coding

This process allows the decisions made in the automation process to become part of the actual software code. While there is

likely to be some consultation with the end users of how the process works, as a matter of practice decisions are often made in

the IT department as they create the workflows and develop the software program. Once the process is launched, any changes

that are needed require IT effort to revise the software code. Obviously, this becomes a labor intensive and costly ongoing

exercise for any process that operates in a highly dynamic environment.

This approach will also limit your business insight and ability to improve your processes since decisions coded in a

programming language will prevent business users from understanding how and why business decisions have been made.

Standard Business Rule Engine (BRE)

Employing a standard business rules engine (BRE) is a step in the right direction when it comes to building in efficiencies into the

business process automation effort. A rules engine utilizes business rules expressed as if…then statements in a fairly technical

language for decision points that can be updated only by IT when changes in the process need to be made. However, the same

issues of decision points being determined in the IT department and a need for IT intervention every time a change needs to

be made still prevails. While process maintenance is less labor intensive and costly than traditional software coding, IT time

required to update the rules engine will be a built-in bottleneck in realizing the desired speed and efficiency from automation in a

dynamic environment.





Page 4

ILOG Business Rule Management System (BRMS)

Employing the ILOG JRules Business Rule Management System (BRMS) with IBM FileNet Business Process Manager,

companies find themselves in a whole different efficiency league where they have the power of automation and decision making

at the control of the person who understands the process and issues best.

We took a lesson from nature and designed our rules engine with a lead bird efficiency strategy. Have you ever watched a flock

of birds in flight and marveled at how they moved so quickly, effortlessly and synergistically time and again? It is because the

whole team of birds is following the lead bird, the one out in front who has the best view of conditions and knows where and when

to dip, dart and duck. The same is true in process management. It is that front line person that knows the challenges of their

process that is in the best position to lead the automation decision making and keep it up to date as the process environment

changes.

With ILOG JRules BRMS, business process automation is easier to understand, maintain and manage. Decision logic is

presented in business terms instead of programming language. The power of change specific to particular workflow segments

is put in the hands of the business manager with a user-friendly web portal. A view into what is going on in the workflow finally

becomes visible to management through the business level reporting and the ability to test a change before implementation is

available through business process simulation.

As a result organizations:

Increase throughput – with the flexibility to customize individual processes for dif ferent situations, you can eliminate

unnecessary steps required in less robust rules engines.

Leverage dynamic environment for competitive advantage – instead of being challenged by living in a dynamic

marketplace, you can use the constant change to your advantage by building agility and flexibility into your rules engine

maintenance by putting it at the fingertips of your front line managers.

Reduce costs – extending control out to the front line managers minimizes the number of people that need to be involved in

making process changes, improving organizational productivity and lowering IT maintenance costs.

Reduce risk in regulatory compliance – with the flexibility to implement decision point changes quickly, you can improveadherence to new regulations as they develop and improve consistency, traceability and auditing of decisions.





Page 5

What approach is best for you?

According to Forrester, there are four categories of processes:

Category Definition Example

People-intensive Strong focus on automating people

intensive activities

Customer support

Decision-intensive Strong focus on processes that require

employees to make mission-criticaldecisions

Lending process

Document-intensive Strong focus on processes that involveextensive use of scanned images forback-office processes

Claim processing

Integration-intensive Strong focus on automating processesthat integrate systems and applications

Order fulfillment

While ILOG JRules BRMS can be instrumental in gaining efficiencies in all of the categories, your best value will be realized in

process environments that are decision-intensive and people-intensive.

As a further guide to what is the best fit for your organizational needs, we have compared the features and functionality of

approaching BPM with traditional software coding, a standard rules engine and ILOG JRules BRMS.

Capabilities Traditional software coding Standard Rules Engine ILOG BRMS

Externalization of business

rules from codeVery limited Yes Yes

Business rule metaphor

supportNone If..then statements only If..then, decision tables,

decision trees

Business rule executionreports

None Technical report only Full support for IT andbusiness

Enterprise business rulerepository

No No Yes

Business rule maintenance

tools for business people

(authoring, test andsimulation)

No No Yes





Page 6

ILOG JRules BRMS integrates rule management with your choice of platform and data storage, supporting every major

runtime platform.





Page 7

Reference: Social Affairs of Junta de Castilla y León

Situation

Solution

Benefits

The Social Affairs agency of Junta de Castilla y León is

responsible for administering the social health programs of one

of Spain’s 17 regional departments. The agency has more than

50,000 people in its program, each with specific healthcare

needs.

With rising healthcare costs, an aging population and

increasingly complex regulations, calculating their socialsecurity benefits and managing their records has become

very complex and time consuming since care must be taken to

always apply the most recent regulations.

• ILOG JRules Business Rule Management System

• IBM FileNet Business Process Manager

• Rapid delivery of social services

• Quick compliance with new laws

• Direct access to decision logic for business users





Page 8

Welsh Assembly Government

Situation

Solution

Benefits

The European Union Common Agricultural Policy provides

annual subsidies of more than £250 million for the 19,000

farmers in Wales. As a major source of income for the Welsh

economy, it is vital that Common Agricultural Policy (CAP)

subsidies are processed as quickly and efficiently as possible.

The Welsh Assembly Government was facing a lot of challenges

with regards to the management of CAP. The previous process

management was based on paper-based applications and abespoke legacy computer system based on 3rd generation

code. The legacy system was slow to change, difficult to use

and each scheme was implemented separately, based on a

different manual process.

IBM FileNet Platform + ILOG: Fully automated request capture

and submission with standardized business processes

throughout all line of subsidies

• Automated request capture and submission

• Standardized business processes throughout all subsidies• Automated best practices

• Improved customer service--on the first day of payment,

more than 75 percent of Single Payment Applicants had

received their payments instead of waiting weeks with the

previous system. In addition, Wales was one of the first (if not

the first) country in Europe to make these payments in 2005.

• Greater flexibility and ability to modify business policies in

hours rather than weeks

• Improved legacy systems integration

• Business process and business rules traceability and

auditability





Page 9

Reference: US Commercial Lender, Automated Credit Request Processing

Situation

Solution

Benefits

This US Commercial Lender has grown rapidly through organic

growth and acquisition over the past several years.

As the bank has expanded, their method for handling

the approval of commercial loans has remained mostly

unchanged over the past ten years. As the bank has expanded

its geographical reach, bank relationship managers were

experiencing delays in routing and approving commercial loanrequests. Ultimately, the bank needed to find a way to deploy a

solution that could replace their current paper-based process

while remaining highly flexible to accommodate planned future

acquisitions and growth.

• ILOG BRMS to handle core business logic across a number

of functional areas including: routing, compliance, scoring

& rating

• IBM FileNet Business Process Manager to handle core

business processes across the enterprise

• Processing cost savings - estimated 10,000 man days the

first year and 12,000 man days thereafter

• Improved staff focus and satisfaction

• Improved compliance - estimated 1,000 man days per year



© Copyright IBM Corporation 2008

IBM Corporation

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01-08

All Rights Reserved.

IBM and the IBM logo are trademarks of IBM

Corporation in the United States, other countries

or both. All other company or product names

are registered trademarks or trademarks of their

respective companies.

For more information, visit

ibm.com /software/ecm

About ILOG

ILOG delivers software and services that empower customers to make better

decisions faster and manage change and complexity. Over 2,500 corporations

and more than 465 leading software vendors rely on ILOG’s market-leading

business rule management system (BRMS), supply chain planning and scheduling

applications, and optimization and visualization software components, to achievedramatic returns on investment, create market-defining products and services, and

sharpen their competitive edge. ILOG was founded in 1987 and employs more than

800 people worldwide. For more information, please visit www.ilog.com.

About IBM ECM

As the clear market leader in Enterprise Content Management (ECM), IBM’s ECM

solutions help organizations make better decisions, faster by managing content,

optimizing business processes and enabling compliance through an integrated

information infrastructure. IBM’s ECM portfolio delivers a broad set of capabilities

and solutions that integrate with existing information systems to help organizations

drive greater value from their content to solve today’s top business challenges.

The world’s leading organizations rely on IBM enterprise content management to

manage their mission-critical business content and processes.

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