Upload
roderick-gordon
View
215
Download
1
Embed Size (px)
Citation preview
State Farm Executive Briefing
IBM Confidential | April 2004 © 2004 IBM Corporation
Business Process Management Systems and SOA – Bridging the Business IT Gap
Edward CalusinskiConsulting IT Architect – FSS Americas
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
A peek into the crystal ball
You knew how many claims you turned around today?
Wouldn’t it be nice if:
You could build applications faster, with less resources and reduce the complexity of your systems?
You knew the number of policies processed today in real-time?How many policies are waiting on calls?
Who had the highest policy per employee at Noon and at 5:00PM?
You could see in real-time a trend in claims that indicated a new business challenge or opportunity?
You could change your business process without changing your core applications?
You could see the impact of a change to a business process without implementing the change?
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Key Technologies
How to make the “Wouldn’t it be nice” questions a reality? A common approach to realizing a solution to these questions is through the blending of these key technologies:
Business Process Management Systems (BPMS) Component Business Models (CBM) Service Oriented Architecture (SOA)
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Defining BPMS:
What is a Business Process Management System?
Business Process Management Systems (BPMS) is a system that is responsible for the design, deployment, monitoring and managing of key internal IT systems as well as key partner IT systems. BPMS are able to analyze, dissect and alter the behavior of an organizations key processes in such a way as to potentially reshape the way an organization does its business. By providing the tools, technologies and industry standards, BPMS will enable an organization to decompose every aspect of its key business processes and assess the value it provides to the organization, rip out inefficiencies in the process execution and if necessary, outsource the major pieces of the process to proven experts in an on-demand strategy”
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
The Business Process Management System StackBusiness Process
Discovery
Business Process Analysis
Business Process Testing
Business Process Design
Business Process Modeler
Business Process Monitor
Business Process Server
Business Process
Repository
Business Process
Deployment
Business Process
Execution
Business Process
Operations
Business Process
Optimization
Web Server SOAP Server
Workflow Engine
Business Process
Instrument
Distributed Computing Infrastructure
Business Process Management
Business Process Automation
Business Process Integration
Business Process Infrastructure
Application Module
Application Module
Process Aware
Application
Integration Adapters
Participant Application
Participant Application
Participant Application
Participant Application
Process Aware
Application
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Modeling of your current business processes enables you to see how well you perform your process today. It also allows you to capture key performance metrics for process optimization or process change analysis
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Simulating your current business processes allows you to see “hot spots” in the process. Simulating newly created or modified processes allows you to see the impact of change before the change is implemented.
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Analysis of your processes “in action” enables you to visualize the your key performance metrics and allows you to make informed business decisions. These metrics could also be fed back into the simulation facility to support more accurate simulations.
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Real time analysis of your business processes is essential for you to be proactive in instituting change, otherwise the damage has already been done before you can do anything about it.
Real Time Business Dashboard
Real Time Business Dashboard
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
A managers view to the business and the processes allows for closer control of the environment. Who is efficient? What are the pressing problems of the day?
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
A customer example leveraging BPMS
Solution
Technology Benefits: Modeling and automation of business
processes Rapid deployment of new processes Clear return on investment
Business Benefits: Implemented a Business Process
Nervous System in three months' time, including modeling and automation of first processes
Able to implement medium to-complex integrations at a rate of one per week.
Met the January 1, 2003 deadline specified by the Belgian government.
Business Challenge
Maintain leadership in an increasingly competitive European energy market by implementing a Business Process Management System (BPMS) that enables Electrabel to change existing and implement new business processes quickly and efficiently .
Airbus anticipatesAirbus anticipates
A BPMS system that included:• Business Process Integration• Business Process Automation• Business Process Management
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
To address business issues, an approach that effectively links business and technology is necessary.
Integrated Response
Business ModelBusiness Model
TechnologyTechnology
Business ProcessBusiness ProcessBusiness
Issue
BusinessIssue
Component Business Model (CBM)
Architecture Views
Component Business Model (CBM)
Architecture Views
CBM + Architecture Views
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
A Business Component Map is a is a tabular view of the business components in the scope of interest.
controlling
executing
directing Business Planning
Business Unit Tracking Sales
ManagementCredit
AssessmentReconciliation
Compliance
Staff Appraisals
Relationship Management
Sector Management
Product Management
Production Administration
Product Fulfillment
Sales
Marketing Campaigns
Product Directory
Credit Administration
Customer Accounts
GeneralLedger
Document Management
Customer Dialogue
Contact Routing
StaffAdministration
BusinessAdministration
New Business Development
Relationship Management
Servicing & Sales
Product Fulfillment
Financial Control and Accounting
Sector Planning
Portfolio Planning
Account Planning
Sales Planning
Fulfillment Planning
Fulfillment Planning
A Business Component is a part of an enterprise that has the potential to operate independently, in the extreme as a separate company, or as part of another company.
Columns are Business Competencies, defined as large business areas with characteristic skills and capabilities, for example, product development or supply chain.
An Accountability Level characterizes the scope and intent of activity and decision-making. The three levels used in CBM are Directing, Controlling and Executing.
Directing is about strategy, overall direction and policy.
Controlling is about monitoring, managing exceptions and tactical decision making
Executing is about doing the work
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
For example, we can use evaluation criteria to produce a ‘heat map’ to help select and prioritise improvement projects.
D = Differentiated
C = Competitive
Target Competency
B = Base
Revenue / Cost
Revenue
Cost
(H, M, or L)
“Hot” Component
controlling
executing
directing Business Planning
Business Unit Tracking
Sales Management
Credit Assessment
Reconciliation
Compliance
Staff Appraisals
Relationship Management
Sector Management
Product Management
Production Administration
Product Fulfillment
Sales
Marketing Campaigns
Product Directory
Credit Administration
Customer Accounts
GeneralLedger
Document Management
Customer Dialogue
Contact Routing
StaffAdministration
BusinessAdministration
New Business Development
Relationship Management
Servicing & Sales Product FulfillmentFinancial Control and Accounting
Sector Planning Portfolio PlanningAccount Planning Sales PlanningFulfillment Planning
Fulfillment Planning
M
M L M L M L M L L M L M
M L
M L M L
M L
L M
M L
M L
L L
M L M L
M L
Revenue/Profit improvement opportunity
M L
L L M L
H L
M L M L L M
Cost control opportunity
L H
M L
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
At the enterprise level it is important to determine the key “Services” provided by a business component that is leveraged by multiple business processes that cut across the enterprise.
In this example, Loan Underwriting business component, provides two Business Services namely Accept_Loan_Application & Check_Loan_ Application_Status.
Both of these Services can be leveraged by multiple variations of Loan_Application_Submission process executed by various channels including Call Center Operators, Customers who are performing Self-Service on the Web, or Data entry professionals who scans the loan applications submitted by postal mail.
Cus
tom
erR
elat
ions
hip
Man
agem
ent
Port
folio
/Ris
k M
anag
emen
t
Loan
O
rigin
atio
n an
d Se
rvic
ing
Acc
ount
ing
and
Aud
it
Rec
onci
liatio
n an
d Se
ttlem
ents
Fina
nce
Planning &
Analysis
Monitor & Control
Operations & Execution
Regulatory & Compliance
Budgeting & Forecasting
Portfolio Management and
Hedging
Customer Relationship
Trade Execution
Credit Analysis
Loan Underwriting
Bank Policies and Procedures
Credit Risk Management
Pipeline Management
Collateral Analysis
Marketing and Syndication
Collateral Management
Portfolio Risk Management
Trading Management
Loan Portfolio Acquisition
Market Risk Management
Research Analytics
Loan Funding & Setup
Loan Servicing & Administration
Pricing
Document Management
Reconciliation and Control
Cash Control
Treasury Management
Compliance Guidelines &
Control
ManagementReporting
Financial Reporting
GL & Accounting
Operational Control
Cus
tom
erR
elat
ions
hip
Man
agem
ent
Port
folio
/Ris
k M
anag
emen
t
Loan
O
rigin
atio
n an
d Se
rvic
ing
Acc
ount
ing
and
Aud
it
Rec
onci
liatio
n an
d Se
ttlem
ents
Fina
nce
Planning &
Analysis
Monitor & Control
Operations & Execution
Cus
tom
erR
elat
ions
hip
Man
agem
ent
Port
folio
/Ris
k M
anag
emen
t
Loan
O
rigin
atio
n an
d Se
rvic
ing
Acc
ount
ing
and
Aud
it
Rec
onci
liatio
n an
d Se
ttlem
ents
Fina
nce
Cus
tom
erR
elat
ions
hip
Man
agem
ent
Port
folio
/Ris
k M
anag
emen
t
Loan
O
rigin
atio
n an
d Se
rvic
ing
Acc
ount
ing
and
Aud
it
Rec
onci
liatio
n an
d Se
ttlem
ents
Fina
nce
Planning &
Analysis
Monitor & Control
Operations & Execution
Regulatory & Compliance
Budgeting & Forecasting
Portfolio Management and
Hedging
Customer Relationship
Trade Execution
Credit Analysis
Loan Underwriting
Bank Policies and Procedures
Credit Risk Management
Pipeline Management
Collateral Analysis
Marketing and Syndication
Collateral Management
Portfolio Risk Management
Trading Management
Loan Portfolio Acquisition
Market Risk Management
Research Analytics
Loan Funding & Setup
Loan Servicing & Administration
Pricing
Document Management
Reconciliation and Control
Cash Control
Treasury Management
Compliance Guidelines &
Control
ManagementReporting
Financial Reporting
GL & Accounting
Operational Control
Regulatory & Compliance
Budgeting & Forecasting
Portfolio Management and
Hedging
Customer Relationship
Trade Execution
Credit Analysis
Loan Underwriting
Bank Policies and Procedures
Credit Risk Management
Pipeline Management
Collateral Analysis
Marketing and Syndication
Collateral Management
Portfolio Risk Management
Trading Management
Loan Portfolio Acquisition
Market Risk Management
Research Analytics
Loan Funding & Setup
Loan Servicing & Administration
Pricing
Document Management
Reconciliation and Control
Cash Control
Treasury Management
Compliance Guidelines &
Control
ManagementReporting
Financial Reporting
GL & Accounting
Operational Control Loan Underwriting
Accept Loan Application
Check Loan Application Status
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
The end to end Business Process such as “Submit Loan Application” itself may be exposed as a Business Service if it needs be invoked by another internal or external system
CreditAnalysis
Check Credit History
Loan Underwriting
Accept Loan Application
Check Loan Application Status
Loan Funding & Setup
Setup Loan Account
Notify the Customer
Submit Loan Application
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Service Oriented Architecture (SOA)
Service Oriented Architecture
In order to fully understand what is meant by service oriented architecture, a common understanding of key terms becomes necessary:
Architecture Service Service Oriented
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Defining Service:
Defining Architecture:
Source: Dictionary.com
Defining the terms of Service Oriented Architecture
“A service is a function that is well defined, self contained and independent of any other service” [1].
A service can be a business function like an account open. A service can be an IT function like logging. A service can be a user interface function like a graphical weather map
display.
[1] D. Barry, Web Services and Service Oriented Architectures. Morgan Kaufmann Publishers, San Francisco CA 2003.
Service Oriented is to design with the intent of expressing a feature or function as a consumable service
Defining Service Oriented:
The art and science of designing and erecting buildings. Buildings and other large structures: the low, brick-and-adobe architecture of the Southwest. A style and method of design and construction: Byzantine architecture. Orderly arrangement of parts; structure: the architecture of the federal bureaucracy; the
architecture of a novel. Computer Science. The overall design or structure of a computer system, including the
hardware and the software required to run it, especially the internal structure of the microprocessor.
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Defining Service Oriented Architecture
Service Oriented Architecture is an architectural design style that expresses computing features as a collection of services. The services are described external from the service implementation, they are stored in a service repository and are consumable.
Definition:
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
The principles and values of the SOA style of design.
Modularity Encapsulation Loose Coupling Security
SOA Business Values: SOA IT Values:
Increased responsiveness Increased business agility Transcends organizational
boundaries Reduces product development
cycle times Exposes commodities in
business process
Build once, use often Services are built by contract Promotes process consistency Allows for localization of function
and standardization of cross cutting concerns
Standardized integration
Separation of Concerns Composable Single Implementation
SOA Principles:
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Example of a Service Oriented Architecture
Mortgage Application
Service Requestor
Mortgage Application
Service Provider
ServiceRegistry
Find Mortgage
Application Service
Publish Mortgage
Application Service
Invoke Mortgage
Application Service
Validate Identity Service
Credit Report Service
Verify Employment
Service
Verify Insurance
Service
Property Appraisal Service
Approval Process Service
CreditBureau
EmploymentVerification
Agency
Call Center
AppraisalBrokerage
ApprovalWorkflow
Credit Bureau API
Credit Report
Employment Verification Request Email
Employment Verification Response Email
Call Center Work Order
Call Center Response
Appraisal Request Fax
Appraisal Response Fax
Initiate Workflow
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Evolution of business solutions – from BPMS and SOA to the next generation of IT systems.
Process Modeling and Analysis
Invoke
Invoke
Invoke
Invoke Invoke
Business Process Workflows
Enterprise Services – Business FunctionsRouting Pub/Sub Transformation Mediation
Transport
Real-time Monitoring and Management
112
2
3
45
678
9
10
11
Distributed Resources: Modular Applications, Databases, Organizations, People
State Farm Executive Briefing
BPMS and SOA – Bridging the Business IT Gap © 2004 IBM Corporation
Summary
You knew how many claims you turned around today?
How does BPMS, CBM and SOA address the “Wouldn’t it be nice if” questions?
You could build applications faster, with less resources and reduce the complexity of your systems?
You knew the number of policies processed today in real-time?How many policies are waiting on calls?
Who had the highest policy per employee at Noon and at 5:00PM?
You could see in real-time a trend in claims that indicated a new business challenge or opportunity?
You could change your business process without changing your core applications?
You could see the impact of a change to a business process without implementing the change?