Tag Archives: PW2012

Business Transformation Through Intelligent BPM

Setrag Khoshafian, Pega’s VP of BPM Technology, presented a breakout session on intelligent BPM and its use in business transformation. He sees BPMS getting intelligent through dynamic case management for ad hoc, unstructured, collaborative processes, able to handle events and more real-world problems. Pega case management includes the Case Designer and Case Portal for designing and managing all sorts of work, right along the spectrum from structured to unstructured. BPM also gets intelligent through analytics, from historical reports to dashboards to predictive and adaptive BPM; their new unified platform brings predictive analytics together with BPM to make this happen.

I had to duck out early to head for the airport; not much new here that hasn’t been covered in other sessions, but a bit more detail on how they are positioning Pega as iBPM in advance of Gartner’s upcoming intelligent BPMS magic quadrant report.

That’s my last session at PegaWORLD, and I’m headed home to Toronto. After a somewhat grueling schedule of conferences so far this year (PEX, Kofax, Appian, Gartner, IBM, ISIS Papyrus, DST and now Pega), things slow down for a while, with just the IRM BPM conference in London later this month and Social BPM Summer School in Como in July between now and the end of the summer.

Increasing Revenue Through Multi-Channel Decisioning

John DeMarchis from PNC Financial Services gave the final morning keynote on how they’re using multi-channel decisioning to increase revenue through a personalized customer experience. They looked at some of the compelling user experiences in the consumer space that are setting expectations of how people want to interact with service providers – Amazon and Google, for example – but also had to consider the loss of confidence in the US financial system that many consumers have experienced through the financial crisis. This led them to develop a customer interaction management system that uses Pega decision management to inform and direct customer interactions through all of their engagement channels. This provides centralized decisioning for consistency, real-time decisioning to allow next best action capabilities during the interaction, and adaptive learning to adjust the models based on market and customer behaviors.

Key to this is determining each customer’s current state so that they can be appropriately targeted for offers and notifications without annoying them, using the channel of their choice. Seriously, I wish my bank could do this.

The results: they are at the top of the customer experience rankings in specific geographic regions, and are ranked highly in terms of how they interact with their customers for marketing purposes. Interestingly, they started this with the simple idea to do cross-selling, but found that using the data and decisioning capabilities, they could do much, much more.

We finished up with some closing thoughts from Alan Trefler, since this is the last of the general keynotes; it’s all breakout sessions from here on in. I have (paper) notes from my meetings with executives yesterday, and a few more meetings today, which I’ll try to summarize here later today or tomorrow.

Decision Management And Next Best Action

Rob Walker, Pega’s VP of Decision Management (who joined Pega as part of the Chordiant acquisition), gave a keynote on day 2 of PegaWORLD about next best action. He started with a great visual of the analysis of a particular baseball pitcher’s stats, showing that there was some degree of predictability of what type of pitch (e.g., fastball, slider) will occur after an initial pitch of each type. In other words, if you knew those statistics, you would have a better chance of being prepared for a particular type of pitch once you were smoked by that initial fastball. Sticking to a baseball theme, he moved on to talk about the concepts behind Moneyball: using statistics to build a better team than you can with beliefs and biases. In other words, more data and a lot of analysis can give you a competitive advantage, an idea that holds value far beyond the realm of baseball.

He spoke about adding in all of that extra data and analytics to the customer view as “color” being added to the picture in order to make details more evident throughout the lifecycle. This can, for example, allow you to detect when a customer is likely to defect to a competitor based on their service history and behavior, or what new services that they are most likely to buy at a given time. Bring this next-best-action marketing to the Pega unified marketing portfolio, and you have this capability baked right into your processes and multi-channel customer communications. Instead of using an inside-out strategy of trying to determine the right market to target for a specific product, this allows for an outside-in strategy of maximizing the value of a specific customer through understanding their propensities, and doing it fast enough to make the next best offer in real time, while they are on your website or on the phone with your customer service or sales rep.

Zurich’s Competitive Advantage: National Underwriting Solution

I’m in the first breakout session of PegaWORLD day 1, and decided to hear Colleen Dugan and Jeff Gallimore of Zurich Financial Services talk about their underwriting solution implemented on Pega. Their original Pega pilot implementation in 2008 was rolled out in 74 days, which is pretty amazing: I know that all the BPMS vendors claim that you can do this, but few large companies can even get the contract executed in 74 days, much less the first production solution. That was just the beginning, of course: they’ve implemented a number of initiatives across their North American organization since then, and a lot of their success has been due to business change management rather than just the technology.

They initially selected BPM as a technology for their organization for a number of reasons:

  • Consistent workflows across the business.
  • Realign work with roles, allowing centralization and offshoring; a big part of this was offloading administrative and support tasks from underwriters, allowing them to be more customer-facing.
  • Transparency in transactions for improved customer service, which is especially important when the underwriter no longer does all of the work on a specific account or transaction; this allows anyone with an interest in the account or transaction being able to have visibility into it.
  • Management tools for measuring and monitoring performance, including SLAs, cycle time, and individual/team productivity metrics; this also allows for doing some tasks based on predictions, such as doing the administrative preparation for an account before the underwriter quotes the work, based on the past history with the account.

There was some resistance from the underwriters who perceived this as losing control and gaining Big Brother, but eventually they saw it as a way to offload the work to which they didn’t add value, allowing them to focus on serving their accounts better. That transition took a lot of change management work: everything from having the right leadership through ensuring that the proper roles are defined.

They identified a number of critical success factors, most of which are related to their organizational change management:

  • Fully defined and documented processes, both current and future state, allowing them to understand what is required for process improvement and transformation. In early cases where they plugged in BPMS before they did this, they just put structure around a process that didn’t necessarily work very well, or what we refer to as “paving the cow paths”. This also allows for identification of common processes across business units, which can significantly accelerate a technology implementation through reuse.
  • Clearly stated objectives that are communicated across impacted areas, so that all business units and users understand why this is being foisted on them, how they’re going to benefit, and why this isn’t just another piece of useless technology that they have to learn. (I’m paraphrasing here).
  • Engagement and buy-in of managers responsible for impacted areas, so that they understand both the higher-level organizational benefits as well as the individual team member benefits, and can be advocates for the new processes and technology.
  • Front line user subject matter experts to participate in design: these are the actual business users, not business analysts (who often report to IT and have never actually processed a transaction themselves), allowing the technical design team to see how the new designs will actually be used.
  • Fully defined change management strategy, more than just a communications plan.

They have developed a change readiness framework, focused on not implementing until they were “ready”, which is defined as the impacted audience being ready for change, having the support model in place, and sufficient confidence levels that benefits will be achieved. They consider seven areas of readiness on their checklist: process, people, product, market, benefits, training and technology.

In response to questions (but not as part of their presentation), they discussed a bit about the solution: a listener detects new email-based requests for renewals, endorsements and other transactions and creates a case in Pega, after which a person has to determine which work basket to assign each transaction – sounds like they could use some intelligent automated routing based on analysis of the email content. Once that initial intake has been done, however, BPM really shines in allowing them to split the work by role, send certain tasks offshore for cost reduction, and monitor everything that’s happening in order to ensure that work is being done effectively and within SLAs. Pega Professional Services did their first pilot implementation, but Cognizant is now their main Pega implementation partner.

Any user-facing BPM implementation changes the way that people work, and requires attention to change management. This was a great presentation on the change management factors that are often left unsaid in discussing BPM implementations, but can cause even a technically perfect project to fail.

Pega’s Intelligent Business Applications With @pegakerim

Kerim Akgonaul, Pega’s VP of product management, finished the day 1 morning keynotes with a view of what’s coming in Pega technology: social, mobile and predictive analytics. He stressed that all of the capabilities that customers need for managing work are built into their integrated PRPC platform, making it unnecessary to integrate several different technologies and components. On top of that, they offer industry frameworks for additional specific functionality, meaning that the actual solutions built on that are (in theory, at least) a thin layer on top of a thick base of standard functionality.

He walked through the high points of their recent technology advances: mobile, social, predictive analytics, decisioning, case management and user interface.

In the mobile area, they believe that it’s just another channel to be served by the same application: the same PRPC application definitions can be used to generate the UI for mobile platforms as well as standard desktop browsers, but with features specific to the device such as geolocation and camera.

Considering social capabilities, they allow for multiple external social media channels (such as Twitter) to be captured used in processing work, but also provide a some social features directly in their applications: Pega Pulse for a collaborative event stream view (similar to Appian Tempo and others), and direct feedback to allow a user to provide feedback to the developers directly from any screen.

In decisioning, they’re implementing a lot around next best action, which analyzes customer behavior and past transactions to determine what the customer is most likely to respond to positively, either while on the telephone with a customer service person or on the web. As with all of the other BPM vendors, who are all eagerly anticipating Gartner’s upcoming report on intelligent BPMS in which analytics plays a big role, Pega is really focused on analytics and how they can improve processes.

They’ve made a lot of headway on getting customers onto their cloud solutions, both as development/test systems and as operational systems; using their VPN tunneling, you can link a Pega cloud application directly to your internal systems. Furthermore, the applications are portable, making it easy to move from a cloud to an on-premise system. The last that I looked at their cloud solution, it was a bit clunky from a provisioning standpoint: implemented on Amazon EC2, it was not really self-provisioned or elastically scalable, although it did provide a viable cloud platform.

They’re showing off their new Case Designer for their case management capabilities; this was a bit clunky before, so I’m looking forward to seeing the new interfaces both for designers and users. In addition, they’re allowing for multi-page document scanning directly into a case, then use CMIS to push that into a content repository. There are some serious issues with that scenario, such as a lack of a chain of custody as well as (I’m guessing) some scalability limitations, but there are certainly situations where this would work.

He ended up talking about user interface, and using Pega as a development tool for building both internal and customer-facing applications. They’re pushing towards HTML5 for more portable, functional and lightweight interfaces.

I have a 1:1 chat with Kerim scheduled for this afternoon, which will give us a chance to dig into some of these a bit more, so stay tuned for that.

Relationship-Driven Customer Service At American Express

Jim Bush, EVP of world service at American Express, delivered a morning keynote here at PegaWORLD to talk about customer service, and how they’re transforming it to provide better value to their customers. 93% of those surveyed say that companies fail to exceed service expectations, which is a complete disconnect with the fact that companies that provide superior service will get 13% more customer dollars because of that. They looked at a new customer service paradigm to deal with the business realities: multiple integrated service touchpoints; experiences benchmarked across industries; consumer choice; increased regulatory scrutiny; and better-informed, more powerful consumers through social media and other means. The customers are back in the driver’s seat in most consumer-facing businesses.

AmEx responded to this by deciding to service customers, not transactions. That’s an important distinction: a specific incident (whether positive or negative) needs the context of the entire customer relationship in order to understand how to best address it. They now consider service to be not a business cost, but an investment in business growth, and focus on respecting and deepening the customer relationship. To do this, they reconstituted their service organization as World Service, with the goal to enable, engage and empower. No small feat, considering that their 20,000 customer care professionals handle hundreds of millions of customer interactions in 22 markets, 15 languages and eight engagement channels.

They have moved past the granular measurement of “how did we do on this transaction” to the net promoter measurement of “would you recommend us to a friend”, which changed how they think about the customer relationship. In fact, they have just trademarked the term “relationship care”.

I’m in the middle of reading United Breaks Guitars: The Power of One Voice in the Age of Social Media – a fantastic and funny read about one man’s journey through a customer service nightmare (and if you haven’t seen the “United Breaks Guitars” video, get on over to YouTube right now) – and one of the points that author Dave Carroll makes in the book is that managing customer service on a transaction basis tends to make companies ignore what they think are statistically insignificant events such as a specific bad transaction with a customer. That, in short, is exactly how not to treat a customer if you want to foster a relationship.

Thinking about the customer relationship rather than just servicing a specific transaction puts AmEx on the right track towards service innovation. They’re also looking at engaging customers through the channel of their choice, from paper to telephone to SMS. If a 162-year-old company can do this, every company has the potential to do the same, and yet many continue to put their head in the sand on turning their customer service around to actually serve the customer in the manner that the customer wants to be served. To serve the global citizen, AmEx combines relationship care with channel convergence, integrated technology, and a global scale with borderless solutions. Through that, they want to turn indifferent (although satisfied) customers into promoters and advocates for the brand. Not many of those customers will end up with the AmEx logo tattooed on their arm, but a single voice can go a long ways these days.

Oh yeah, and they use some Pega software.

Delivering Customer Centricity And Operational Excellence

PegaWORLD 2012 day 1 kicked off with a keynote by Alan Trefler on the changing ways in which organizations interact with their customers. In the keynote that I gave at the Appian conference a few months ago, I nailed this point as well, talking about my own experiences with two organizations: one that gets it, and one that doesn’t.

He talked about some of the customers that have implemented Pega since last year’s conference: lots of financial services, which is their mainstay, but many other verticals as well. He referred to BPM as “unfortunately named”: they consider BPM, CRM, business rules and case management all as part of helping their customers to deliver. Trefler is a former chess master, and talked about both chess and ping pong (while hitting ping pong balls into the audience of 2000 – impressive multitasking) as analogues for business: strategy and agility.

He believes that the traditional data-based 360 degree of a customer isn’t enough: you also need a 360 view of intent (why/what) as well as process (where/when/how). Adding intent and process into the data view of a customer enables “high definition” customer service (360 + 360 + 360 = 1080 – get it? Winking smile ) that allows for the holy grail of cross-channel interactions, cross-silo processes and operational efficiencies. This starts with having business and IT work together to capture business objectives using their DCO technique and tools, generating models without writing huge requirements documents, then move on to develop executing systems from those models. Great vision, but in practice it doesn’t always happen that way: I still see a lot of customers (of Pega and other vendors who promote model-driven development) stuck in old waterfall development models, and unable to break out of them due to culture, intertia and budget incentives. Not the fault of the vendors, but it remains a barrier to their success.

He finished up with more about their positioning and vision, including a quick view of their six Rs of managing work: receive, route, report, research, respond and resolve. Good start to the keynotes, and entertaining as always.