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Lean Sigma Tools Applied to BPM

Chris Rocke and Jane Long from Whirlpool presented on their experiences with integrating LSS tools into BPM practices to move beyond traditional process mapping. Whirlpool is a mature Six Sigma company: starting in their manufacturing areas, it has spread to all other functions, and they’ve insourced their own training certification program. Six Sigma is not tracked as separate cost/benefit within a project, but is an inherent part of the way every project is done.

They introduced BPM during to a large-scale overhaul of their systems, processes and practices; their use of BPM is includes process modeling and monitoring, but not explicit process automation with a BPMS outside of their existing financial and ERP systems. However, they are creating a process-centric culture that does manage business processes in the governance and management sense, if not the automation sense in all cases. They brought LSS tools to their BPM efforts, such as process failure mode and effects analysis (PFMEA), data sampling and structure methods, thought maps and control charts; these provide more rigorous analysis than is often done within BPM projects.

Looking at their dashboards, they had the same problem as Johnson & Johnson: lots of data but no consistent and actionable information. They developed some standard KPIs, visualized in a suite of seven dashboards, with alert when certain control points are exceeded. Their Six Sigma analytics are embedded within the dashboards, not explicit, so that the business owners view and click through the dashboards in their own terms. The items included in the dashboard are fairly dynamic: for example, in the shipping dashboard, the products that vary widely from expected and historic values are brought forward, while those that are within normal operating parameters may not even appear. Obviously, building the models underlying this was a big part of the work in creating the dashboards: for example, shipping dashboard alerts are based on year-over-year differences (because sales of most products are seasonal) with control limits that are the mean of the YOY differences +/-  two standard deviations for a yellow alert, or three standard deviations for a red alert, plus other factors such as checking to see if the previous year’s value was an anomaly, weighted by the number of units shipped and a few other things thrown in.

The analytical calculations behind a dashboard might include internal forecasts or market/industry values, include seasonal fluctuations or not, depending on the particular measurement. The dashboard visuals, however, conceal all the complications of the underlying model. Alerts aren’t necessarily bad, but indicate a data point that’s outside the expected range and warrants investigation or explanation. They’ve seen some success in reducing variability and therefore making their forecasts more accurate: preventing rather than detecting defects.

They’re also using SAP’s Xcelsius for the dashboard itself; that’s the third company that I’ve heard here that is using that, which is likely due in part to the large number of SAP users but also gives credit to the flexibility and ease of use of that tool. They’re using SAP’s Business Warehouse for housing the data, which extracts from their core ERP system nightly: considerably more up-to-date than some of the others that we’ve seen here, which rely on monthly extracts manipulated in Excel. Although IT was involved in creating and maintaining BW, the LSS team owns their own use of Xcelsius, which allows them to modify the dashboards quickly.

Tagged
2010 02 24 Sandy Kemsley BPM
IQPC
Lean Six Sigma Comments (0)

Using Dashboards to Run the Business and Focus Improvements

David Haigh of Johnson & Johnson presented on how they’re using dashboards in their process improvement efforts; this is much further into my comfort zone, since dashboards are an integral part of any BPM implementation. He’s part of the consumer products division rather than pharmaceutical or medical: lots of name brands that we all see and use every day.

Their process excellence program covers a range of methods and tools, but today’s talk was focused on dashboards as a visualization of a management system for your business: to set strategy, track progress, and make corrections. Like many companies, J&J has a lot of data but not very much that has been transformed into actionable information. He makes an automotive analogy: a car engine typically has 43 inputs and 35 outputs, but we drive using a dashboard that has that information rolled up into a few key indicators: speed, RPM, temperature and so on.

They see dashboards as being used for governing the company, but also for informing the company, which means that the dashboards are visible to all employees so that they understand how the company is doing, and how their job fits into the overall goals and performance. Dashboards can – and should – leverage existing reporting, especially automated reporting, in order to reduce the incremental work required to create them. They have to be specific, relating jobs to results, and relevant in terms of individual compensation metrics. They have dashboards with different of levels of details, for different audiences: real-time detailed cockpits, medium-level dashboards, and reports for when a repeatable question can’t be answered from a dashboard within three clicks (great idea for deciding when to use a dashboard versus a report, btw). They used a fairly standard, slightly waterfall-y method for developing their dashboards, although did their first rollout in about 3 months with the idea that the dashboards would be customizable to suit changing requirements. One challenge is their wide variety of data sources and the need for data manipulation and transformation before reporting and feeding into dashboards.

They had most of their reports in Excel already, and added SAP’s Xcelsius to generate dashboards from those Excel reports. That provided them with a lot of flexibility in visualization without having to rewrite their entire ETL and reporting structure (I know, export to Excel isn’t the best ETL, but if it’s already there, use it).

One of the big benefits is the cross-departmental transparency: sales and logistics can see what’s happening in each others areas, and understand how their operations interrelate. This highlights their non-traditional approach to dashboard visibility: instead of just having management view the dashboards, as happens in most companies, they expose relevant parts of the dashboard to all employees in order to bring everyone into the conversation. They actually have it on monitors in their cafeteria, as well as on the intranet. I love this approach, because I’m a big believer in the benefits of transparency within organizations: better-informed people make better decisions, and are happier in their work environment. They’re able to weave the dashboards into their process improvements and how they engage with employees in running the business: being able to show why certain decisions were made, or the impact of decisions on performance.

Their next steps are to review and improve the metrics that they collect and display, and to start involving IT to automate more of the data collection by pushing information directly to Cognos rather than Excel. There were a ton of questions from the audience on this; some are using dashboards, but many are not, and are interested in how this can help them. I’m interested in how they plan to push the dashboard results beyond just human consumption and into triggering other automated processes through event processing, but I’ll have to catch David offline for that conversation.

Tagged
2010 02 24 Sandy Kemsley BPM
CEP
IQPC
Lean Six Sigma Comments (1)

Lean Six Sigma & Process Improvement: David Brown of Motorola

I missed the first morning of the IQPC Lean Six Sigma & Process Improvement conference in Toronto today, but with my usual impeccable timing, showed up just in time for lunch (where we had to explain the rules of curling to the American attendees). The first session this afternoon is with David Brown, a black belt at Motorola, where the term “Six Sigma” was first coined and is still used to make their processes more effective, efficient, productive, and transparent.

There has been a transformation for them in how they analyze their processes: ranging from just looking at transactions to high-level intelligence including complex simulations and forecasting. Since they run SAP for their ERP, they have a number of SAP business intelligence (Xcelsius and Business Objects) products, although their most complex analysis is done with Oracle Crystal Ball.

Brown’s presentation was short – less than 10 minutes – and the rest of the session was an interactive one-on-one interview with questions from Charles Spina of e-Zsigma, the conference chair. The Q&A explored much more about how Motorola uses business analytics tools, and opened it up to the (small) audience for their experience with analytics. Not surprisingly, there has been quite a bit of success through the introduction of analytics to process improvement teams: sometimes it’s the black belts themselves, sometimes it’s a separate analytics group that works closely to develop the reports, analysis, and more complex intelligence based on the large volumes of data collected as part of any process improvement project.

Reporting tools can be as simple as Excel – for simple needs – through more complex solutions that include ETL from multiple data sources and regularly scheduled reports, such as Crystal Reports and Xcelsius. Legacy systems can make that a bit of a challenge; often these end up as extracts to Excel or Access, which are then remixed with other sources. Extracts such as this can be really problematic, as I’ve seen first-hand with many of my customers, since there’s no way to keep the data completely in sync with the underlying systems, and typically any one legacy system doesn’t have all the relevant data, so there can be a real problem in matching up related data from multiple systems. Brown underlined that the key issue is to get all of your data into a central data warehouse in order to determine if your data is complete and clean, and to facilitate reporting and analytics. This is especially important for process engineers when trying to do time studies over long periods of time: if you don’t have some consistent representation of the processes over the time period in question, then your analysis will suffer.

Motorola is using their data analytics to improve operational processes, such as order shipping, but also what-if scenarios to inform salespeople on the impact of discount levels to the bottom line. In many cases, this is an issue of data integration: Sabrina Lemos from United Airlines (who will be on the panel following) shared what they were able to recover in late container fees just by integrating their container tracking system with a database (Access, alas) that generates their invoices. Interestingly, I wouldn’t have thought of this as a process improvement initiative – although it is – but rather just as an artifact of doing some clever system integration.

They also discussed the challenges with presenting the results of analytics to the less numerically inclined, which often entails rolling data up to some simpler charts that can be drilled into as required, or just presented in a PowerPoint or PDF file. The real ROI may come from more interactive tools, however, such as dashboards that show operational alerts, or real-time what-if analysis to support human and automated decisions. Since Lean and Six Sigma tools are inherently analytical, this isn’t a new problem for the people in this audience; this is a matter of building relationships early with the non-analytical business managers, getting some early successes in projects to encourage adoption, and using different presentation and learning styles to present the information.

Because of the nature of this audience, the analytics that they’re discussing are typically for human consumption; in the BPM world, this is more and more moving to using the analytics to generate events that feed back into processes, or to inform automated decisioning. Either way, it’s all about improving the business processes.

Tagged
2010 02 23 Sandy Kemsley BPA
IQPC
Lean Six Sigma Comments (0)

NetWeaver BPM update #SAPTechEd09

Wolfgang Hilpert and Thomas Volmering gave us an update on NetWeaver BPM, since I was last updated at SAPPHIRE when they were releasing the product to full general availability. They’re readying the next wave of BPM – NetWeaver 7.2 – with beta customers now, for ramp-up near the beginning of the year and GA in spring of 2010.

There are a number of enhancements in this version, based on increasing productivity and incorporating feedback from customers:

  • Creating user interfaces: instead of just Web DynPro for manual creation of UI using code, they can auto-generate a UI for a human-facing task step.
  • New functions in notifications.
  • Handling intermediate events for asynchronous interfaces with other systems and services.
  • More complete coverage of BPMN in terms of looping, boundary events, exception handling and other constructs;
  • Allowing a process participant to invite other people on their team to participate in a task, even if not defined in the process model (ad hoc collaboration at a step).
  • The addition of a reporting activity to the process model in order to help merge the process instance data and the process flow data to make available for in-process analytics using a tool such as BusinessObjects – the reporting activity takes a snapshot of the process instance data to the reporting database at that point in the process without having to call APIs.
  • Deeper integration with other SAP business services, making it easier to discover and consume those services directly within the NetWeaver Process Composer even if the customer hasn’t upgraded to a version of SAP ERP that has SOA capabilities
  • Better integration of the rules management (the former Yasu product) to match the NetWeaver UI paradigms, expose more of the functionality in the Composer and allow better use of rules flow for defining rules as well as rules testing.
  • Business analyst perspective in process modeler so that the BA can sketch out a model, then allow a developer to do more of the technical underpinnings; this uses a shared model so that the BA can return to make modifications to the process model at a later time.

I’d like to see more about the ad hoc runtime collaboration at a task (being able to invite team members to participate in a task) as well as the BA perspective in the process modeler and the auto-generation of user interfaces; I’m sure that there’s a 7.2 demo in my future sometime soon.

They also talked briefly about plans for post-7.2:

  • Gravity and similar concepts for collaborative process modeling.
  • Common process model to allow for modeling of the touchpoints of ERP processes in BPM, in order to leverage their natural advantage of direct access to SAP business applications.
  • Push further into the business through more comprehensive business-focused modeling tools.
  • Goal-driven processes where the entire structure of the process model is not defined at design time, only the goals.

In the future, there will continue to be a focus on productivity with the BPM tools, greater evolution of the common process model, and better use of BI and analytics as the BusinessObjects assets are leveraged in the context of BPM.

2009 10 14 Sandy Kemsley BI
BPA
BPM
BRM
SAP Comments (0)

Social media and business activity monitoring #BTF09

James Kobielus and Natalie Petouhoff presented at a breakout session on social media as a method for gaining visibility into your customer service processes: customers will react on social media channels such as Twitter, Facebook, review and community sites, and blogs if they have either a good or bad customer service experience. I’m not sure that this fits into the classic definition of BAM, but it does provide insight into how well you’re working with your customers.

They referred to the “witness factor” that social media has on business transformation: if people within the company know that they are being watched and commented upon, they often change their behavior in order to make those comments more favorable. Social media provides one window for a company into their customers’ impressions of the company and products; since people are much more likely to comment if they have a bad experience than a good one, those are overwhelmingly negative, but still represent valid complaints.

One problem with many current BAM applications is that they’re trapped within a BPMS framework, and are focused primarily on the data and events generated by that BPMS. Instead, we need to move towards a more comprehensive monitoring environment that can accept information from a number of different sources, including social media channels. Just think of tweets as events that can feed into a monitoring dashboard, allowing a customer service representative to review and respond to those in the context of any other customer-related events and information. Kobielus mentioned that there is little integration of social media into traditional BAM tools, but I think that we’ll see this sort of functionality being offered by other tools, such as more forward-thinking CRM.

This seemed to be a bit of a disjointed presentation, with social media on one side and BAM on the other, but there are ways to bring this together: in advance of this session, I started a discussion with my fellow Enterprise Irregulars about Twitter being used for customer engagement (not just one-way PR blasts), which has resulted in a fascinating stream of messages that weave around these same issues. After I’ve had a chance to digest those a bit more, and think about how this impacts on business processes, I’ll bring some of those ideas forward.

2009 10 09 Sandy Kemsley Forrester Comments (1)

HandySoft BizFlow BPM

I caught up with Garth Knudson from HandySoft a few weeks ago; I’ve looked at their BizFlow product previously, and they’re currently at version 11.3 so have a pretty long track record. Although HandySoft handles the same sort of structured processes as you see in most other BPMS vendors, they really focus on ad hoc and dynamic (unstructured) processes, where either a user needs to jump out of an existing process definition at a particular step to an unstructured flow and bring the results back to the structured process, or even create a new dynamically-defined process. Some processes just can’t be modeled in advance due to non-standard processes, changing roles and responsibilities, or process participants and actions being dependent on the participating user request: this is more like managing a project rather than a traditional process, but with BPM capabilities and structured applied to it rather than trying to manage this in email. These types of dynamic processes can form a huge portion of an organization’s processes: think of all the ad hoc processes that you have now in email, only with no control or monitoring. Some significant research efforts are underway on dealing with dynamic processes, as I saw at the academic conference in Ulm two weeks ago; Gartner and Forrester are all over this area as well, so I expect that we’ll see some advances from many vendors in this area in the next few years.

The structured parts of the process are managed by BizFlow BPM, whereas the unstructured workflow portions, whether spawned from a structured process or initiated directly, are managed by the OfficeEngine front-end application; in both cases, the process engine is BizFlow. Although you use an email-like interface to kick things off, and email is used as a transport for external recipients, this provides tracking of ad hoc processes that’s just not possible in email.

HandySoft: Specify ad hoc task detailTo start a completely ad hoc process, you create a task, specify properties such as instructions and deadlines, and attach any documents required or link to documents in a ECM repository using a URL in the rich comments field on the launch form. You use ActiveDirectory/LDAP or type in external email addresses to select participants, specify whether the participants can reassign the task further, and submit the task; then, the task is available for monitoring and you can see who has done what in a graphical view. Process participants receive tasks as calendar invitations, then click through to login to BizFlow and work on the task assigned to them, which may include adding other people to the collaboration. The web-based user interface includes a list of ad hoc tasks in which you are participating, a work list for your activities within structured processes, a launch pad for initiating new tasks or processes, and a graphical view of your SLA scorecard. From there, you can click through to the task monitor for ad hoc tasks that you have created, and see the state of each participant.

HandySoft: Task monitoringSince external participants can’t access BizFlow directly, they do their work outside the system and reply; replies from external participants are returned as a proxy, and an internal user must enter the response manually. This sort of one-step collaborative process – including multiple participants and reassignments – can replace the current practice of emailing around to multiple people for information or comments, then manually tracking to see who has responded. In an environment dominated by ad hoc processes in email, this provides a big benefit for tracking who is doing what, and when.

It’s fairly similar for launching an ad hoc task from a structured process: the structured process is modeled (using BPMN) in a similar fashion to other BPMS tools, and launched using a web form. From the participant’s UI at any step, however, you have an “Assign a task” tab that pops up the same form as was used for the purely ad hoc tasks; essentially, this allows delegating the structured process activity to the collaborative task, which can then include people who were not originally involved in the structured process. It doesn’t change the structured process; it just pops out to a collaborative task at this point, and when that completes, it returns to this step in the structured process and continues on. Just as with the standalone ad hoc tasks, this reduces the amount of unmonitored email activity that is prevalent in many structured processes where someone needs to request more information at a step.

In many BPM implementations, there is an attempt to capture all possible exceptions and collaborations as part of the structured process, but in reality, this just isn’t possible; they end up in email, phone calls and other untraceable activities. As Clay Richardson of Forrester pointed out in his vendor snapshot on HandySoft:

Traditional BPM platforms perpetuate the myth of neatly structured processes – with most vendors providing ample support for capturing reoccurring and well-defined workflows, but minimal support for managing unstructured and dynamic business processes. This chasm between the worlds of structured and unstructured processes forces teams to develop custom workarounds to handle ad hoc routing and collaborative interactions, ultimately increasing the time and cost to deliver BPM solutions.

HandySoft: Detailed stats of SLA violationAllowing an ad hoc, yet monitored, task to be launched from any point in a structured process has the effect of reducing the complexity of the structured process without sacrificing monitoring and auditability of the process. In BizFlow, launching an ad hoc task from a structured process causes an indicator to appear on the graphical view of the executing process to indicate that a task has been launched from that point, and the complete audit trail of structured and unstructured processes is maintained. If the ad hoc task isn’t completed within the specified deadline, that SLA violation shows on the structured process monitoring, and you can click to the OfficeEngine interface for detailed monitoring of the task.

On their product release agenda for later this year are a reporting service module – there’s already a fairly capable BAM functionality – and full rich internet application development capabilities to create more usable web forms for the user interface.

2009 09 21 Sandy Kemsley BPM Comments (6)

Discovering Reference Models by Mining Process Variants Using a Heuristic Approach #BPM2009

Chen Li of University of Twente gave the last presentation of the conference on process variant mining. We heard yesterday in the tutorial on flexibility about process variants; one issue with process variants is that there needs to be some way to identify which of the variants are important enough to update the original process model. The paper describes a heuristic search algorithm for determining which of the variants are important, by considering both the similarity to the original process model and the most common changes amongst the variants, e.g., the same new step is added to almost all process variants.

Since the process can be varied at runtime, the new process model doesn’t have to be perfect, it just has to be better than the original one. In general, the more activities contained in a candidate model and the more that its structure matches that of the variants, the better it is: they have created a fitness function that combines these two parameters and calculates how good a specific candidate model is. The search tree used to find the optimal candidate process model generates all potential candidates by changing one activity at a time, calculating the best fit, then replacing the original with the candidate if it is better than the original. This continues until no better candidate model can be calculated, or until you reach your maximum search distance (which would be set in order to bound computations).

The algorithm was evaluated with simulations, indicating that the most important changes tend to be performed at the beginning of the search.

2009 09 10 Sandy Kemsley BPA
BPM2009 Comments (2)

Divide-and-Conquer Strategies for Process Mining #BPM2009

In the first of two papers in the final session of the conference, Josep Carmona of Universitat Politecnica de Catalunya presented on process mining calculation strategies. The theory of regions shows how to derive a Petri net representation of a process model from the process log, which shows the transition between states, but it’s very computationally expensive. This paper deals with ways of making that computation less expensive in order to deal effectively with large logs.

First is a decompositional strategy, which partitions the regions in a way that allows the identification of a set of state machines that cover all the events, then uses parallel composition to assemble the state machines into a Petri net.

The second approach is a higher-level divide-and-conquer strategy, where the event log is recursively partitioned by event class until the log sections are small enough to use other techniques. The clustering of the events is the key thing here: first, compute the causal dependency graph, then use spectral graph theory to find clusters of highly related events that will be partitioned off into their own section of the event log.

What they’ve seen in experiments using this technique is that there is a significant computational improvement (from minutes to seconds) from the decompositional approach, and that the divide-and-conquer approach allows for the processing of event logs that are just too large for other techniques.

You can get Genet, the tool that they developed to do this, here.

2009 09 10 Sandy Kemsley BPA
BPM
BPM2009 Comments (1)

Discovering process models from unlabelled event logs #BPM2009

Diogo Ferriera of Universidade Tecnica de Lisboa presented a paper on process discovery based on unlabelled event logs: where the events in the log are only identified by the specific task, not by the process instance. Consider that a process instance may be executed via multiple paths through the process model, resulting in a different sequence of events logged: although you might know all possible paths through the model, you don’t know which one that any given instance followed. Also consider that processes will be executing simultaneously, so their events are intermingled.

Taking a probabilistic approach, you can take the event sequence and the source sequence (i.e., you know both the events and the instances that created them) and generate a matrix of probabilities that any given event will follow another within the same source instance: that’s some fairly standard math. He then took the event sequence and the matrix (which now represents a priori knowledge about how events interrelated), and did a fairly magic-looking calculation that calculated the source sequence based on that information.

The problem, of course, is that you don’t have the magic matrix, you only have the event sequence: initialize the matrix to something, then use the event sequence and the matrix to estimate the source sequence, then use the event sequence and the estimated source sequence to estimate the matrix. Wash, rinse, repeat until the matrix converges. You could initialize the matrix randomly, but that would take a while to converge (or would converge to a local maximum); instead, Ferreira pulled a rabbit out of his hat by stating that the matrix can be initialized with the transition probabilities present in the event sequence, that is, as if the event sequence were generated from a single source. As the paper states:

Even if x [event sequence] is the result of interleaving a number of sources, their underlying behaviour will be present in M+ [probability matrix] since consistent behaviour will stand out with stronger transition probabilities than the spurious effects of random interleaving. Therefore, M+ is a good initial guess for the estimation of M.

Amazingly, this works. Or maybe not so amazing, because I suppose there would be no research paper if this didn’t work. As the number of sources (instances) increases, the accuracy approaches that of when both the event and source sequence are known; as the number of overlapping sources increases, the accuracy drops to about 60% (by the time that you reach 10 overlapping instances), then flattens out.

There are a number of use cases for this: preprocessing for other process mining algorithms, or as a labeling mechanism to find the source instance when it is unknown. Or just if you want to show off some cool math at parties.

2009 09 09 Sandy Kemsley BPA
BPM
BPM2009 Comments (1)

Innovation World: ChoicePoint external customers solutions with BPM, BAM and ESB

I took some time out from sessions this afternoon to meet with Software AG’s deputy CTOs, Bjoern Brauel and Miko Matsumura, but I’m back for the last session of the day with Cory Kirspel, VP of identity risk management at ChoicePoint (a LexisNexis company), on how they have created externally-facing solutions using BPM, BAM and ESB. ChoicePoint screens and authenticates people for employment screening, insurance services and other identity-related purposes, plus does court document retrieval. There’s a fine line to walk here: companies need to protect the privacy of individuals while minimizing identify fraud.

Even though they only really do two things — credential and investigate people and businesses — they had 43+ separate applications on 12 platforms with various technologies in order to do this. Not only did that make it hard to do what they needed internally, customers were also wanting to integrate ChoicePoint’s systems directly into their own with an implementation time of only 3-4 months, and provide visibility into the processes.

They were already a Software AG customer with the legacy modernization products, so took a look at their BPM, BAM and ESB. The result is that they had better visibility, and could leverage the tools to build solutions much faster since they weren’t building everything from the ground up. He walked us through some of the application screens that they developed for use in their customers’ call centers: allow a CSR to enter some data about a caller, select a matching identity by address, verify the identity (e.g., does the SSN match the name), authenticate the caller with questions that only they could answer, then provide a pass/fall result. The overall flow and the parameters of every screen can be controlled by the customer organization, and the whole flow is driven by a process model in the BPMS which allows them to assign and track KPIs on each step in the process.

They’re also moving their own executives from the old way of keeping an eye on business — looking at historical reports — to the new way with near real-time dashboards. As well as having visibility into transaction volumes, they are also able to detect unusual situations that might indicate fraud or other situations of increased risk, and alert their customers. They found that BAM and BI were misunderstood, poorly managed and under-leveraged; these technologies could be used on legacy systems to start getting benefits even before BPM was added into the mix.

All of this allowed them to reduce the cost of ownership, which protects them in a business that competes on price, as well as offering a level of innovation and integration with their customers’ systems that their competitors are unable to achieve.

They used Software AG’s professional services, and paired each external person with an internal one in order to achieve knowledge transfer.

2008 11 04 Sandy Kemsley BPM
ESB
InnovationWorld Comments (0)

Business Rules Forum: James Taylor and Neil Raden keynote

Opening the second conference day, James Taylor and Neil Raden gave a keynote about competing on decisions. First up was James, who started with a definition of what a decision is (and isn’t), speaking particularly about operation decisions that we often see in the context of automated business processes. He made a good point that your customers react to your business decisions as if they were deliberate and personal to them, when often they’re not; James’ premise is that you should be making these deliberate and personal, providing the level of micro-targeting that’s appropriate to your business (without getting too creepy about it), but that there’s a mismatch between what customers want and what most organizations provide.

Decisions have to be built into processes and systems that manage your business, so although business may drive change, IT gets to manage it. James used the term “orthogonal” when talking about the crossover between process and rules; I used this same expression in a discussion with him yesterday in discussing how processes and decisions should not be dependent upon each other: if a decision and a process are interdependent, then you’re likely dealing with a process decision that should be embedded within the process, rather than a business decision.

A decision-centric organization is focused on the effectiveness of its decisions rather than aggregated, after-the-fact metrics; decision-making is seen as a specific competency, and resources are dedicated to making those decisions better.

Enterprise decision management, as James and Neil now define it, is an approach for managing and approving the decisions that drive your business:

  • Making the decisions explicit
  • Tracking the effectiveness of the decisions in order to improve them
  • Learning from the past to increase the precision of the decisions
  • Defining and managing these decisions for consistency
  • Ensuring that they can be changed as needed for maximum agility
  • Knowing how fast the decisions must be made in order to match the speed of the business context
  • Minimizing the cost of decisions

Using an airline pilot analogy, he discussed how business executives need a number of decision-related tools to do their job effectively:

  • Simulators (what-if analysis), to learn what impact an action might have
  • Auto-pilot, so that their business can (sometimes) work effectively without them
  • Heads-up display, so they can see what’s happening now, what’s coming up, and the available options
  • Controls, simple to use but able to control complex outcomes
  • Time, to be able to take a more strategic look at their business

Continuing on the pilot analogy, he pointed out that the term dashboard is used in business to really mean an instrument cluster: display, but no control. A true dashboard must include not just a display of what’s happening, but controls that can impact what’s happening in the business. I saw a great example of that last week at the Ultimus conference: their dashboard includes a type of interactive dial that can be used to temporarily change thresholds that control the process.

James turned the floor over to Neil, who dug further into the agility imperative: rethinking BI for processes. He sees that today’s BI tools are insufficient for monitoring and analyzing business processes, because of the agile and interconnected nature of these processes. This comes through in the results of a survey that they did about how often people are using related tools: the average hours per week that a marketing analyst spends using their BI tool was 1.2, versus 17.4 for Excel, 4.2 for Access and 6.2 for other data administration tools. I see Excel everywhere in most businesses, whereas BI tools are typically only used by specialists, so this result does not come as a big surprise.

The analytical needs of processes are inherently complex, requiring an understanding of the resources involved and process instance data, as well as the actual process flow. Processes are complex causal systems: much more than just that simple BPMN diagram that you see. A business process may span multiple automated (monitored) processes, and may be created or modified frequently. Stakeholders require different views of those processes; simple tactical needs can be served by BAM-type dashboards, but strategic needs — particularly predictive analysis — are not well-served by this technology. This is beyond BI: it’s process intelligence, where there must be understanding of other factors affecting a process, not just measuring the aggregated outcomes. He sees process intelligence as a distinct product type, not the same as BI; unfortunately, the market is being served (or not really served) by traditional query-based approaches against a relatively static data model, or what Neil refers to as a “tortured OLAP cube-based approach”.

What process intelligence really needs is the ability to analyze the timing of the traffic flow within a process model in order to provide more accurate flow predictions, while allowing for more agile process views that are generated automatically from the BPMN process models. The analytics of process intelligence are based on the process logs, not pre-determined KPIs.

Neil ended up by tying this back to decisions: basically, you can’t make good decisions if you don’t understand how your processes work in the first place.

Interesting that James and Neil deal with two very important aspects of business processes: James covers decisions, and Neil covers analytics. I’ve done presentations in the past on the crossover between BPM, BRM and BI; but they’ve dug into these concepts in much more detail. If you haven’t read their book, Smart Enough Systems, there’s a lot of great material in there on this same theme; if you’re here at the forum, you can pick up a copy at their table at the expo this afternoon.

2008 10 29 Sandy Kemsley BI
BPM
BRM
BusinessRulesForum Comments (23)

Ultimus: Process optimization

Chris Adams is back to talk to us about process optimization, both as a concept and in the context of the Ultimus tools available to assist with this. I’m a bit surprised with the tone/content of this presentation, in which Chris is explaining why you need to optimize processes; I would have thought that anyone who has bought a BPMS probably gets the need for process optimization.

The strategies that they support:

  • Classic: updating your process and republishing it without changing work in progress
  • Iterative: focused and more specific changes updating live process instances
  • Situational/temporary: managers changing the runtime logic (really, the thresholds applied using rules) in live processes, such as changing an approval threshold during a month-end volume increase
  • Round-trip optimization: comparing live data against modeling result sets in simulation

There’s a number of tools for optimizing and updating processes:

  • Ultimus Director, allowing a business manager to change the rules in active processes
  • Studio Client, the main process design environment, which allows for versioning each artifact of a process; it also allows changes to be published back to update work in progress
  • iBAM, providing visibility into work in progress; it’s a generic dashboarding tool that can also be used for visualization of other data sets, not just Ultimus BPM instance data

He finished up with some best practices:

  • Make small optimizations to the process and update often, particularly because Ultimus allows for the easy upgrade of existing process instances
  • Use Ultimus Director to get notifications of
  • Use Ultimus iBAM interactive dials to allow executives to make temporary changes to rule thresholds that impact process flow

There was a great question from the audience about the use of engineering systems methodology in process optimization, such as theory of constraints; I don’t think that most of the vendors are addressing this explicitly, although the ideas are creeping into some of the more sophisticated simulation product.

2008 10 23 Sandy Kemsley BI
BPA
Ultimus Comments (1)

Ultimus: Reports and Dashboards

Chris Adams is probably now thinking that I’m stalking him: not only do I attend his first two technical sessions, but when he switches to the business track for this presentation, I follow him. However, I wanted to hear about their reporting and analytics capabilities, and he covered off reporting, dashboards, BAM, alerts and using third-party analytics.

Ultimus BPM SuiteHe started out with the underlying premise that you need to have governance over your business data, or your processes won’t be effective and efficient; in order to do that, you need to identify the key performance indicators (KPIs) that will be used to measure the health of your processes. This means both real-time monitoring and historical analytics.

Ultimus iBAM provides a real-time dashboard that works with both V7 and V8. Only in V8, there’s also email alerts when specific KPI thresholds are reached.

For offline reporting, they have three types:

  • Process reports, automatically created for process instance analytics
  • User reports, also automatically created for workload and user productivity
  • Custom reports that allow for filtering of the historical data, filtered by other business data

Reports can be viewed as charts as well as tabular reports; there is a third-party report generation tool invisibly built in (Infologistics?); Chris noted that this is the only third-party OEM component in Ultimus.

If you’re using Crystal Reports or Cognos, Ultimus has now opened up and created connectors to allow for reporting on the Ultimus history data directly from those platforms; by the end of the year, they’ll add support for SQL Server Reporting Services as well.

There will be a more technical session on the reporting and analytics later today.

2008 10 23 Sandy Kemsley BI
Ultimus Comments (0)

ProcessWorld 2008: Maureen Fleming, IDC

Maureen Fleming of IDC spoke in the Process Intelligence and Performance Management track on process measurement, and how it’s used to support decisions about a process as well as having an application context. She defines strategic measurement as guiding decisions about where to focus across processes, providing information on where to improve a process, and supporting fact-based dispute arbitration.

She showed a chart of timeliness of measurement versus complexity:

  • Simple and timely: measure and spot-check performance within a process
  • Simple and time critical: need for continuous measurement and problem identification within homogeneous processes
  • Complex and timely: regular reporting to check performance across heterogeneous process islands
  • Complex and time-critical: need for continuous measurement and problem identification across heterogeneous process islands

Leading enterprises are moving towards more complex measurement. I’m not sure I agree with her definition of “timely”, which seems to be used to mean “historical” in this context.

She breaks down measurement tools by the intention of the measurement system: what happened (process intelligence and reporting)/what will happen(analytics, complex event processing)/what is happening (BAM)/why it is happening (root cause analysis))/how we should respond (intelligent process automation).

She went through IDC’s categorization of BPMS — decision-centric automation (human-centric), sensing automation (integration-centric and complex event processing), and transaction-centric automation (integration-centric) — and discussed the problem of each BPMS vendors’ individual BAM creating islands of process measurement. Process metrics from all process automation systems need to feed into a consolidated process measurement infrastructure: likely an enterprise process warehouse with analytics/BAM tied to that more comprehensive view, such as ARIS PPM.

She discussed KPIs and how the goals for those KPIs need to consider both business objectives and past performance: you can’t understand performance variations that might occur in the present without looking at when and why they occurred in the past.

Although her presentation mostly focussed on process measurement, the Q&A was much more about sense and respond: how to have specific measurements/events trigger something back in the process side in order to respond to an event.

2008 02 15 Sandy Kemsley ARISProcessWorld
BI Comments (0)

Agent Logic’s RulePoint and RTAM

This post has been a long time coming: I missed talking to Agent Logic at the Gartner BPM event in Orlando in September since I didn’t stick around for the CEP part of the week, they persisted and we had both an intro phone call and a longer demo session in the weeks following. Then I had a crazy period of travel, came home to a backlog of client work and a major laptop upgrade, and seemed to lose my blogging mojo for a month.

If you’re not yet familiar with the relatively new field of CEP (complex event processing), there are many references online, including a recent ebizQ white paper based on their event processing survey which determined that a majority of the survey respondents believe that event-driven architecture comprises all three of the following:

  • Real-time event notification – A business event occurs and those individuals or systems who are interested in that event are notified, and potentially act on the event.
  • Event stream processing – Many instances of an event occur, such as a stock trade, and a process filters the event stream and notifies individuals or systems only about the occurrences of interest, such as a stock price reaching a certain level.
  • Complex event processing – Different types of events, from unrelated transactions, correlated together to identify opportunities, trends, anomalies or threats.

And although the survey shows that the CEP market is dominated by IBM, BEA and TIBCO, there are a number of other significant smaller players, including Agent Logic.

In my discussions with Agent Logic, I had the chance to speak with Mike Appelbaum (CEO), Chris Bradley (EVP of Marketing) and Chris Carlson (Director of Product Management). My initial interest was to gain a better understanding of how BPM and CEP come together as well as how their product worked; I was more than a bit amused when they referred to BPM as an “event generator”. I was someone mollified when they also pointed out that business rules engines are event generators: both types of systems (and many others) generate thousands of events to their history logs as they operate, most of which are of no importance whatsoever; CEP helps to find the few unique combinations of events from multiple data feeds that are actually meaningful to the business, such as detecting credit card fraud based on geographic data, spending patterns, and historical account information.

Agent Logic - RulePoint - Home

Agent Logic has been around since 1999, and employs about 50 people. Although they initially targeted defence and intelligence industries, they’re now working with financial services and manufacturing as well. Their focus is on providing an end-user-driven CEP tool for non-technical users to write rules, rather than developers — something that distinguishes them from the big three players in the market. After taking a look at the product, I think that they got their definition of “non-technical user” from the same place as the BPM vendors: the prime target audience for their product would be a technically-minded business analyst. This definitely pushes down the control and enforcement of policies and procedures closer to the business user.

They also seem to be more focused on allowing people to respond to events in real-time (rather than, for example, spawning automated processes to react to events, although the product is certainly capable of that). As with other CEP tools, they allow multiple data feeds to be combined and analyzed, and rules set for alerts and actions to fire based on specific business events corresponding to combinations of events in the data feeds.

Agent Logic has two separate user environments (both browser-based): RulePoint, where the rules are built that will trigger alerts, and RTAM, where the alerts are monitored.

Agent Logic - RulePoint - Rule builderRulePoint is structured to allow more technical users work together with less technical users. Not only can users share rules, but a more technical user can create “topics”, which are aggregated, filtered data sources, then expose these to the less technical to be used as input for their rules. Rules can be further combined to create higher-level rules.

RulePoint has three modes for creating rules: templates, wizards and advanced. In all cases, you’re applying conditions to a data source (topic) and creating a response, but they vary widely in terms of ease of use and flexibility.

  • Templates can be used by non-technical users, who can only set parameter values for controlling filtering and responses, and save their newly-created rule for immediate use.
  • The wizard creation tool allows for much more complex conditions and responses to be created. As I mentioned previously, this is not really end-user friendly — more like business analyst friendly — but not bad.
  • The advanced creation mode allows you to write DRQL (detect and response query language) directly, for example, ‘when 1 “Stock Quote” s with s.symbol = “MSFT” and s.price > 90 then “Instant Message” with to=”broker@broker.com”,body=’MSFT is at ${s.price}”‘. Not for everyone, but the interesting thing is that by using template variables within the DRQL statements, you can converted rules created in advanced mode into templates for use by non-technical users: another example of how different levels of users can work together.

Agent Logic - RulePoint - WatchlistsWatchlists are lists that can be used as parameter sets, such as a list of approved airlines for rules related to travel expenses, which then become drop-down selection lists when used in templates. Watchlists can be dynamically updated by rules, such as adding a company to a list of high-risk companies if a SWIFT message is received that references both that company and a high-risk country.

Agent Logic - RulePoint - ServicesRulePoint includes a large number of predefined services that can be used as data sources or responders, including SQL, web services and RSS feeds. You can also create your own services. By providing access to web services both as a data source and as a method of responding to an alert, this allows Agent Logic to do things like kick off a new fraud review process in a BPMS when a set of events occur across a range of systems that indicate a potential for fraud.

Lastly, in terms of rule creation, there are both standard and custom responses that can be attached to a rule, ranging from sending an alert to a specific user in RTAM to sending an email message to writing a database record.

Although most of the power of Agent Logic shows up in RulePoint, we spent a bit of time looking at RTAM, the browser-based real-time alert manager. Some Agent Logic customers don’t use RTAM at all, or only for high-priority alerts, preferring to use RulePoint to send responses to other systems. However, compared to a typical BAM environment, RTAM provides pretty rich functionality: it can link to underlying data sources, for example, by linking to an external web site with criminal record data on receiving an alert that a job candidate has a record, and allows for mashups with external services such as Google maps.

Agent Logic - RTAM - AlertsIt’s also more of an alert management system rather than just monitoring: you can filter alerts by the various rules that trigger them, and perform other actions such as acknowledging the alert or forwarding it to another user.

Admittedly, I haven’t seen a lot of other CEP products to this depth to provide any fair comparison, but there were a couple of things that I really liked about Agent Logic. First of all, RulePoint provides a high degree of functionality with three different levels of interfaces for three different skill levels, allowing more technical users to create aggregated, easier-to-use data sources and services for less technical users to include in their rules. Rule creation ranges from dead simple (but inflexible) with templates to roll-your-own in advanced mode.

Secondly, the separation of RulePoint and RTAM allows the use of any BI/BAM tool instead of RTAM, or just feeding the alerts out as RSS feeds or to a portal such as Google Gadgets or Pageflakes. I saw a case study of how Bank of America is using RSS for company-wide alerts at the Enterprise 2.0 conference earlier this year, and see a natural fit between CEP and this sort of RSS usage.

Update: Agent Logic contacted me and requested that I remove a few of the screenshots that they don’t want published. Given that I always ask vendors during a demo if there is anything that I can’t blog about, I’m not sure how that misunderstanding occurred, but I’ve complied with their request.

2007 12 12 Sandy Kemsley CEP Comments (0)

Integration World Day 1: Peter Kurpick

Peter Kurpick, CPO (Chief Product Officer) of webMethods Business Division, gave an overview of the technology direction. He talked about the paradigm for SOA governance, with the layers of technical services, business services and policies being consumed by business processes: the addition of the policy layer (which is the SOA governance part) sets this apart from many of the visions of SOA that you see.

He brought along Susan Ganeshan, the SVP of Product Management and Product Marketing, to give a (canned) demo similar to one that we saw yesterday at the end of the analyst sessions. She showed the process map as modelled in their BPM layer, where the appropriate services were called and other points of integration using webMethods, then we saw the custom portal-type interfaces for customers, suppliers and internal workers. They have Fair Isaac’s Blaze Advisor integrated with the BPMS that allows them to change rules for in-flight processes, and their own monitoring and analytics as well as some new Cognos analytics integration. She also showed us the CentraSite integration, where information about services and their policies are stored; CentraSite can be used to dynamically select from multiple equivalent services based on policies, such as selecting from one of several suppliers. The idea of the demo is to show how all of the pieces can come together — people, web services, B2B services, legacy services, and policy governance — all using the webMethods suite.

The original core functionality provided by webMethods is the ESB (originally from the EAI space), but now that’s surrounded by BPM, composite applications, B2B integration and legacy modernization tools (from the Software AG side). Around that is BAM, which is being raised in importance from being just an adjunct to BPM to being an event-related technology in its own right. Around all of this is SOA governance, which is what CentraSite brings to this.

The next release, due sometime in 2008, will be a fully-integrated suite of the Software AG and webMethods products, although Kurpick didn’t provide a lot of information.

2007 11 06 Sandy Kemsley BPM
ESB
InnovationWorld Comments (0)

IQPC BPM Summit: Kirk Gould

Kirk Gould, a performance consultant with Pinnacle West Capital, talked about business processes and metrics. I like his definition of a metric: “A tool created to tie the performance of the organization to the business objectives”, and he had lots of great advice about how to — and how not to — develop metrics that work for your company.

I came right off of my presentation before this one, so I’m a bit too juiced up to focus as well on his presentation as it deserves. However, his slides are great and I’ll be reviewing them later. He also has a good handout that takes us through the 10 steps of metric development:

  1. Plan
  2. Perform
  3. Capture
  4. Analyze
  5. Display
  6. Level
  7. Automate
  8. Adjust
  9. Manage
  10. Achieve

He has a great deal more detail for each of these steps, both on the handout and in his presentation. He discussed critical success factors and performance indicators, and how they fit into a metrics framework, but the best parts were when he described the ways in which you can screw up your metrics programs: there were a lot of sheepish chuckles and head-shaking around the room, so I know that many of these hit home.

He went through the stages of metrics maturity, which I’ll definitely have to check out later since he flew through the too-dense slides pretty quickly. He quotes the oft-used (and very true) line that “what gets measured, gets managed”, a concept that is at the heart of metrics.

2007 06 27 Sandy Kemsley IQPC Comments (1)

Complex Event Processing

A good intro article on complex event processing (CEP), subtitled “Bringing BPM into the real world”. The future of BAM.

2006 01 08 Sandy Kemsley BPM
CEP Comments (0)

BAM technical session

This seemed to be a morning for networking, and I’m arriving late for a technical session on FileNet’s BAM. I missed the hands-on session this morning so wanted to get a closer look at this before it’s released sometime in the next couple of months.

The key functional things in the product are dashboards, rules and alerts. The dashboard part is pretty standard BI presentation-layer stuff: pick a data source, pick a display/graph type, and position it on the dashboard. Rules are where the smarts come in: pick a data source, configure the condition for firing an alert, then set the content and recipient of the alert. Alerts can be displayed on the recipient’s dashboard, or sent as an email or SMS, or even launch other processes or services to handle an exception condition automatically.

There’s a nice interface for configuring the dimensions (aggregations) in the underlying OLAP cubes, and for configuring buckets for running statistics. The data kept on the BAM server is cycled out pretty quickly: it’s really for tracking work in progress with just enough historical data to do some statistical smoothing.

Because they’re using a third-party OEM product for BAM, it’s open to other data sources plugged into the server, used in the OLAP cubes, combined on the dashboards or used in the rules. However, this model adds yet another server, since it pulls pre-processed work-in-progress data from the Process Analyzer (so PA is still required) and has a sufficiently hefty memory requirement since it’s maintaining the cubes in memory that it’s probably not a good idea to co-locate it on a shared application server. I suppose that this demotes PA to a data mart for historical data as well as a pre-processor, which is not a completely bad thing, but I’m imagining that a full replacement for PA might be better received by the customers.

2005 11 09 Sandy Kemsley FileNet Comments (0)

Hot BAM!

If there’s anything better than hearing about a hot new product like FileNet’s BAM, it’s hearing it in Danny Pidutti’s lovely Aussie accent. There’s a few misconceptions in his presentation around the differences between BI and BAM; I see BAM as just a process-oriented subset of BI, although the real-time nature means that we’re in the realm of operational BI, such as was discussed in an eBizq webinar “Improving Business Visibility Through Operational BI” on Oct 27th (www.ebizq.net/webinars/6298.html according to my calendar, sorry for the lack of a direct hyperlink but that’s the limits of blogging via Blackberry email) and an earlier one about operational BI on Oct 12th, although I can’t recall who hosted it.

This looks like a pretty significant improvement on the old Process Analyzer: about 20 pre-configured reports, configurable role-based dashboards, KPIs for scorecard-like capabilities, alerts and other fun stuff. A bit of a catch-up from.a competitive standpoint, but FileNet’s more known for solid technology than being the first to market these days.

The demo starts with a Celequest login screen, telling you who the OEM vendor is. At this point, it’s really a standard BI demo, showing how dashboards are configured, alerts set and related functions.

My only question is, what took you guys so long?

2005 11 08 Sandy Kemsley BI
FileNet Comments (0)