Enabling Healthy Decisions

BPM / Process, Innovation

BPI Example

June 16, 2007 by George Van Antwerp 0 Comments

I often get asked the question of what I mean by BPI or Business Process Innovation. I often talk about how process can create a competitive differentiator for companies. There is technical innovation, product innovation, cultural innovation, etc.

Here is a quick example. I am a die-hard Quicken user. Every time I get gas, I print my receipt, carry it around for a day, and then enter it in the computer. To Amoco, Mobil, BP, I am someone what “invisible” as a customer. They don’t have a relationship with me.

Why don’t they think about their role in the process. It wouldn’t be too hard to get me to register my cards with them in return for them sending me an e-mail with a digital receipt. They could even send me a file that I could launch which would place the transaction in Quicken for me.

This benefits me (simpler, no risk of losing the receipt). And, it benefits the gas companies because they now have a relationship with me. They could include a coupon for goods inside the store or a car wash with the receipt. Next time I go in, they can now cross-sell me.

This is what I mean by BPI. Thinking about the process differently and looking at how you can impact the process in a novel way to capture more value and add value to the constituents.

Picture is worth a thousand words (at least)

June 16, 2007 by George Van Antwerp 0 Comments

As a former architect, I am a big believer that pictures have significant value in the business world. I have been asked dozens of times to take complex ideas and simplify them down to a single-frame image that people can post in their cube or use in a meeting. These images can be powerful.

At Express Scripts, we choose to take on the battle of moving market share from Lipitor to Zocor a few years ago. This was set up to save clients and patients billions of dollars as the Zocor patent expired. We had a list of 50 ideas which we paired down to 30. The challenge was how to get people to think about and rally around the 30. I came up with what was initially called the “bubble chart” which showed the 30 ideas in swim lanes and then time-mapped horizontally against key milestones. This became used everywhere and even presented to the street.

This is important to BPM in several ways:

If BPM is to be transformational, you need a future state vision that can be captured and disseminated across the company.
If process mapping is part of your communication strategy, a simple to understand process map is critical.

I started thinking about this when I received an e-mail newsletter from BentonsEdge which is a company that helps you frame out your value proposition. I have met with Dan Davison, the CEO, several times. He seems to have a great process and good understanding of helping clients get to a simple story about their value proposition.

One example is below. It is a little busy, but it captures all the complexities of raising capital in a one-page slide which is amazing.

http://www.tellingyourstory.com/content_library/files/whitepapers/RaisingCapital.pdf

Continue reading →…

Business Tools, General Business, Methodology, Value Propositions

BPM Lessons Learned

June 8, 2007 by George Van Antwerp 0 Comments

So…many of you thought I was going to offer some BPM lessons learned the other day. Here they are:

If you jump right to technology, you will go backwards and have to do process mapping and/or reengineering. Additionally, your project will take longer because you don’t understand your metrics and the business side.
BPM done right will cause organizational pushback. Your adoption strategy is important. This is traditionally overlooked in most technology implementations but here (whether you do this on paper or in a system) you are telling people how to do things that may have been fairly unstructured before. You need to think through this.
Don’t throw out the baby with the bathwater. What I mean by this is don’t abandon what has worked for you in the past. If you have application development, project management, release management, or change management practices that work, don’t ignore them just because BPM is new.
Real-time ongoing JAD doesn’t work. I have seen a few companies try to do real-time application development where the users are looking over the shoulders of the developers and trying to make changes. Just because you can do this – don’t.
Take action and divide your objectives into bite-size chunks of work. Don’t take on an end-to-end process that spans the globe and touches 5,000 people. Understand the big picture and fix the key pain points in the process.
BPM technology will make you think about SOA (Service Oriented Architecture). And, having SOA will make BPM easier.
Just because there is a better way is not a reason to change. Focus on the business case…document the current state…and capture the actual results.
Find an internal evangelist at a high enough level to support your efforts. (always a good thing)
No one (vendor or consultant) can provide everything you need.
Simulation doesn’t exist (that I have seen demonstrated to show value).

BPM Overview, Methodology, Software

Misc Articles to Read

June 6, 2007 by George Van Antwerp 0 Comments

I have been trying to keep up with my reading and falling behind. There are a lot of articles that I skim and take something from, but that I hoped to synthesize and share. Rather than get too far in the hole, I am going to share a few here.

Two sources I would recommend for reading are Align Journal (new magazine) and BPTrends. They both have great process related articles.

McKinsey on applying lean to application development
McKinsey survey on IT Strategy
Several McKinsey articles on pricing
Good overview of DFSS (Design for Six Sigma)
Article on the book Payback and Innovation
Article on Experience Mapping in Healthcare
Article on Business Process Innovation (BPI) at TransUnion
Top 10 Technology Projects
Article on whether to fix before you outsource
Creating a process centered organization
Creating a business process approach to management
ITIL and Six Sigma
What is TRIZ
Compliance and BPM
Lean for Service Processes
Sub-processes
Value mapping vs. detailed process mapping
Skills of a business process expert

BPM Overview, General Thoughts, Methodology

Blog Inspiration – CEO’s Secret Handbook

June 4, 2007 by George Van Antwerp 0 Comments

I often get asked why I blog and how I make the time for it. (Other than the obvious – person and corporate branding)

Blogging for me is a good outlet for thinking through ideas. I put my thoughts here for numerous reasons. Two particular things stick out to me as I think about getting inspired daily to put thoughts down.

When I graduated business school, one of my teachers (Mahendra Gupta) who is now Dean of Washington University in St. Louis told me that I should try to put down my thoughts every day so that I could capture my lessons learned. I have tried different mediums over the years, but they were difficult to maintain and impossible to search.
The other thing is an article that Business 2.0 published about the CEO’s Secret Handbook in 2005. I started pulling together all my key documents that I had amassed over the years. I then started a book where I pasted things in there with some comments. It has been a living document, but I am going to put everything here. Again, it is easier to search…more dynamic…and accessible from anywhere.

The handbook is summarized below thanks to Career Communication’s Group – Bill Swanson’s ’25 Unwritten Rules of Management’:

Learn to say, “I don’t know.” If used when appropriate, it will be often.
It is easier to get into something than it is to get out of it.
If you are not criticized, you may not be doing much.
Look for what is missing. Many know how to improve what’s there, but few can see what isn’t there.
Viewgraph rule: When something appears on a viewgraph (an overhead transparency), assume the world knows about it, and deal with it accordingly.
Work for a boss with whom you are comfortable telling it like it is. Remember that you can’t pick your relatives, but you can pick your boss.
Constantly review developments to make sure that the actual benefits are what they are supposed to be. Avoid Newton’s Law.
However menial and trivial your early assignments may appear, give them your best efforts.
Persistence or tenacity is the disposition to persevere in spite of difficulties, discouragement, or indifference. Don’t be known as a good starter but a poor finisher.
In completing a project, don’t wait for others; go after them, and make sure it gets done.
Confirm your instructions and the commitments of others in writing. Don’t assume it will get done!
Don’t be timid; speak up. Express yourself, and promote your ideas.
Practice shows that those who speak the most knowingly and confidently often end up with the assignment to get it done.
Strive for brevity and clarity in oral and written reports.
Be extremely careful of the accuracy of your statements.
Don’t overlook the fact that you are working for a boss. Keep him or her informed. Avoid surprises! Whatever the boss wants takes top priority.
Promises, schedules, and estimates are important instruments in a well-ordered business.
You must make promises. Don’t lean on the often-used phrase, “I can’t estimate it because it depends upon many uncertain factors.”
Never direct a complaint to the top. A serious offense is to “cc” a person’s boss.
When dealing with outsiders, remember that you represent the company. Be careful of your commitments.
Cultivate the habit of “boiling matters down” to the simplest terms. An elevator speech is the best way.
Don’t get excited in engineering emergencies. Keep your feet on the ground.
Cultivate the habit of making quick, clean-cut decisions.
When making decisions, the pros are much easier to deal with than the cons. Your boss wants to see the cons also.
Don’t ever lose your sense of humor.
Have fun at what you do. It will reflect in your work. No one likes a grump except another grump.

General Thoughts

BPR vs BPM: What’s Different?

June 4, 2007 by George Van Antwerp 0 Comments

I had the opportunity last week to debrief Michelle Cantara (VP at Gartner) about Talisen. We had met at the Gartner BPM conference, and she was intrigued by our offerings around BPM which include several fixed fee projects. In talking with her about BPM and sharing with her our methodology and typical sales pitch, I was flattered when she saw the table below and suggested that she might re-use it.This shows the difference between BPR (Business Process Reengineering) and BPM (Business Process Management).

Asking a 90-year Old to Use E-mail

June 2, 2007 by George Van Antwerp 0 Comments

You can use business rules in many ways. I think one of the most important areas is in customer segmentation. There is initial segmentation around which customers to target with which offering (e.g., cross-selling, multi-variate analysis). There is secondary segmentation around which message will compel them to act on an offering (e.g., campaign management). Additionally, there is segmentation around which channel they are likely to respond to (i.e., e-mail, text message, letter, call, web, TV, radio).

My 90-year old grandmother who does Masters swimming called earlier this week because she had a letter asking her to send in some information to them via e-mail. She can barely use a phone without silver dollar size numbers so asking her to respond using e-mail is ridiculous.

As you design processes that spawn communications or create messaging, thinking through the multiple levels of segmentation and the supporting rules is critical. Ideally, some type of “artificial intelligence” by which the rules are automatically updated as the system learns is ideal. Linking success (i.e., outcomes) to the logic used allows you to refine and improve your communications and marketing over time.

BPM / Process, General Business

The Art of Ware

May 30, 2007 by George Van Antwerp 0 Comments

I was just skimming a story from Guy Kawasaki’s blog about The Art of ‘Ware by Bruce Webster. I was a little skeptic, but Guy always has great instincts. I read a few of the chapters in the book and think you would enjoy it. Especially if you work with or at a software company.

Here is some text from the home page about The Art of ‘Ware…

Back in the early 1990s, I [Bruce Webster] wrote and published The Art of ‘Ware (M&T Books, 1995), a reinterpretation of Sun Tzu’s The Art of War, a 6th century BC treatise on conflict and warfare. My reinterpretation of Sun Tzu’s maxims applied to developing and marketing information technology products, most particularly software. Here’s an example:

Sun Tzu (Chapter 2, ‘Waging War’, 1910 Lionel Giles translation): Now, when your weapons are dulled, your ardor damped, your strength exhausted and your treasure spent, other chieftains will spring up to take advantage of your extremity. Then no man, however wise, will be able to avert the consequences that must ensue.
The Art of ‘Ware (Chapter 2, ‘Supporting Development’, 1995 edition): When your developers are burned out, your technology aging, your resources diminished, and your advantages gone, then others will take advantage of your weaknesses and cut into your market. Even expensive consultants and new CEOs won’t be able to turn things around.

Books / Articles, General Business, Leadership, Software, Weblogs

Generation Y Summary…for BPM

May 30, 2007 by George Van Antwerp 0 Comments

“They’re ambitious, they’re demanding and they question everything, so if there isn’t a good reason for that long commute or late night, don’t expect them to do it. When it comes to loyalty, the companies they work for are last on their list – behind their families, their friends, their communities, their co-workers and, of course, themselves.”

This is from a Fortune article titled “Attracting the twentysomthing worker” by Nadira Hira from May 15, 2007. Here are a few of the highlights from the article…then I will tie it back to BPM and why you care.

Someone born between 1977 and 1995
79.8M of them (versus 78.5M Boomers)
“Most high-maintenance workforce in history” (see RainmakerThinking for more)
They go to the gym.
Over 1/3 have tatoos.
30% have piercings (other than in their ears).
Accustomed to diversity.
Electronic.
Not just willing to work long hours for the sake of facetime.
Communicate different ways (e.g., text messaging).
Live at home after college.
Involve their parents in the decision of the job more.

So why do you care as you think about BPM?

You have to hire them to work on your project. Like Myers-Briggs, understanding personality, motivation, and interests helps you build a high-performance team.
They will be part of your process so you need to think about how they experience the job and how they will interact with technology. Your solution is for the future not necessarily for the past.
This should make you think about generational differences – X, Y, Boomers. All of this is important when you facilitate an event to flush out the process.
They may someday be your boss. (It is an interesting experience the first time you realize you are old enough to have a boss younger than you and more successful than you.)
They will get BPMS and wonder why you use paper and don’t have integrated systems today. They can help drive change.

Books / Articles, General Business, Leadership

The McKinsey Way

May 28, 2007 by George Van Antwerp 0 Comments

You can certainly never go wrong looking at McKinsey. Their consultants are usually very top notch and their process of thinking and root cause analysis is great. Although this post is more about how you analyze a problem (i.e., business process innovation), it also makes a point about how important process and methodology is. The only way of delivering consistent, high-quality advice worldwide is to have a process of training and consulting that leverages smart people and delivers them to clients.

(Never mind the fact that McKinsey once told me that they only interview people with a 4.0 or people with a 3.8 and above from a top 5 business school. I didn’t fit the bill, but I have several good friends who were there. I have lots of respect for them.)

The McKinsey Way is actually a book so you can see some insight into the company. I have read the book and recommend it. Rather than re-type all my notes, I found comments about the book at MeansBusiness and on blog called Brian Groth’s Life at Microsoft and looked at notes on MECE (mutually exclusive, collectively exhaustive) from a book review on The McKinsey Mind.

My old boss who worked for McKinsey was a genius at asking the probing questions. She knew how to get to root cause better than anyone I worked for. This is essential in diagnosing any problem not least of which are process problems. (Since I assume you only look at BPM to drive value where you have some type of problem.)

So MECE, as Brian states in his blog, it suggests you should do the following:

Identify the problem using a mutually exclusive, collectively exhaustive framework and then map the problem out using some type of logic tree (see example).
Create a hypothesis (or hypotheses) about the solution…this drives your analysis.
Analyze the data…remember that the only thing that is right is data (assuming some data integrity).
Repeat steps 3 & 4 until you find a fact-based solution that makes sense.

From the book, some of the other key points are:

“The most brilliant solution, backed up by libraries of data and promising billions in extra profits, is useless if your client or business can’t implement it.”
“Most business problems resemble each other more than they differ.”
“If you get your facts together and do you analyses, the solution will come to you.”
“If you keep your eyes peeled for examples of 80/20 in your business, you will come up with ways to improve it.”
“Know your solution so thoroughly that you can explain it clearly and precisely to your client in 30 seconds.”
“It’s much better to get to first base consistently than to try to hit a home run and strike out 9 times out of 10.”
“Just as you shouldn’t accept I have no idea from others, so you shouldn’t accept it from yourself, or expect others to accept it from you. This is the flip side of I don’t know.”
“When you’re picking people’s brains, ask questions and then let them do the talking. Keep the interview on track by breaking in when necessary.”

Books / Articles, BPM Overview, Business Tools, General Business, Leadership, Methodology

5 Patterns of Extraordinary Careers

May 27, 2007 by George Van Antwerp 0 Comments

At Express Scripts, all of us on the leadership team (top 1.5%) were given the book The 5 Patterns of Extraordinary Careers. It was a good book with several relevant tips especially for someone in the BPM space that is likely playing the role of change agent or somone whose career might include an objective of becoming the Chief Process Officer or Chief Innovation Officer.

From the website, I have pulled in the 5 Patterns. They also have an online quiz which gives you feedback on whether you are on your way to an extraordinary career.

1. Understand the Value of You
People with extraordinary careers understand how value is created in the workplace, and translate that knowledge into action, building their personal value over each phase of their careers.

2. Practice Benevolent Leadership
People with extraordinary careers do not claw their way to the top, they are carried there.

3. Overcome the Permission Paradox
People with extraordinary careers overcome one of the great Catch-22s of business: you can’t get the job without experience and you can’t get the experience without the job.

4. Differentiate Using the 20/80 Principle of Performance
People with extraordinary careers do their defined jobs exceptionally well but don’t stop there. They storm past pre-determined objectives to create breakthrough ideas and deliver unexpected impact.

5. Find the Right Fit (Strengths, Passions & People)
People with extraordinary careers make decisions with the long-term in mind. They willfully migrate towards positions that fit their natural strengths and passions and where they can work with people they like and respect.

Best Advice

May 26, 2007 by George Van Antwerp 0 Comments

I am not really sure of the best advice I have ever received. Most of the things that jump to mind as good advice are:

Be yourself.
Everyone has something to add – treat them with respect.
Travel the world.
Keep a journal of what you learn each day.
No one remembers you for how hard you work…your family is your memory.
Just act…don’t overanalyze.
Nothing will be perfect.

Here is advice from some well known names from a Fortune article titled “The Best Advice I Ever Got” (March 21, 2005 – page 90).

Warren Buffett “You’re right not because others agree with you, but because your facts are right.”
Richard Branson “Make a fool of yourself. Otherwise you won’t survive.”
Howard Schultz “Recognize the skills and traits you don’t possess, and hire people who have them.”
A.G. Lafley “Have the courage to stick with a tough job.”
Sumner Redstone “Follow your own instincts, not those of people who see the world differently.”
Meg Whitman “Be nice, do your best – and most important, keep it in perspective.”
Jack Welch “Be yourself.”
Sallie Krawcheck “Don’t listen to the naysayers.”
Vivek Paul “Don’t limit yourself by past expectations.”
Dick Parsons “When you negotiate, leave a little something on the table.”
Andy Grove “When ‘everyone knows’ something to be true, nobody knows nothin’.”
Anne Mulcahy “Remember the parable of the cow in the ditch.” [First, get the cow out of the ditch. Second, find out how the cow got in the ditch. Third, make sure you do whatever it takes so the cow doesn’t go into the ditch again.]
Brian Grazer “All you really own are ideas and the confidence to write them down.”
Rick Warren “Regularly sit at the feet of Peter Drucker.” [You need mentors.]
Jim Collins “The real discipline comes in saying no to the wrong opportunities.”
Peter Drucker “Get good – or get out.”
Ted Turner “Start young.”
David Neeleman “Balance your work with your family.”
Mickey Drexler “Bail out a business that isn’t growing.”
Brian Roberts “Let others take the credit.”
Marc Benioff “Incorporate philanthropy into your corporate structure.”
Hector Ruiz “Surround yourself with people of integrity, and get out of their way.”
Donny Deutsch “If you love something, the money will come.”
Klaus Kleinfeld “Keenly visualize the future.”
Ann Fudge “Don’t chart your career path too soon.”
Herb Kelleher “Respect people for who they are, not for what their titles are.”
Clayton Christensen “You can learn from anyone.”
Ted Koppel “Do what you love.”

Books / Articles, Business Tools, Leadership

Creative Rigor and Planned Spontaneity

May 26, 2007 by George Van Antwerp 0 Comments

I had been debating starting a second (or technically third) blog. As you may already know, BPM Enterprise is another site which I originally posted blogs on, but now they have been kind enough to simply repost my blogs. This gets me access to about 5,000 people which is great.

The newest blog was going to be more around leadership and business in general. For years, I have used two expressions to synthesize my approach to business.

Creative Rigor – This is my blend of right and left brain thinking. I was classically trained as an architect (buildings not systems). My biggest takeaways from architecture were (a) how to listen and capture requirements and (b) the fact that there is no right answer only an optimal answer. When I blend this with my pre-disposition to math and my MBA training, I find that I approach problem solving very different than others.
Planned Spontaneity – This is my approach to consulting. You have to be 2-3 steps ahead of your client and able to whiteboard out something real-time. Ideally, you have already thought through the idea beforehand to understand the pros and cons. Not easy, but it works great when you are ready.

So, I am going to start adding some of my musings and thought around business here. I hope to someday publish them in a book, but that may be a ways off unless I can use this medium to capture and begin synthesizing the concepts.

Marketing Process

May 25, 2007 by George Van Antwerp 0 Comments

Interestingly, yesterday, I heard from five different companies about using BPM for marketing. So, I have spent the day (and will continue to spend time) flushing out the marketing processes and the value proposition associated with improving marketing processes and managing them using BPM.

For example:
* Reducing the cycle time of product development
* Easing version control of public relations
* Minimizing pricing errors
* Using data triggers to initiate processes (e.g., competitive intelligence initiates change to promotional materials)

Pricing struck me as a good one since yesterday my wife was looking at a golf club (Taylor Made R7 driver). At the store we buy from, it was $300. Online and in the paper at the store down the street, it was $190. Our golf pro called the Taylor Made rep and found out that the other store had jumped the gun. The discount wasn’t supposed to begin until this weekend.

Now, both the store and Taylor Made are going to sacrifice several days of higher prices all because the pricing coordination didn’t happen right. Coordination of releasing information across channels and partners is a big deal but something that a basic rules engine could manage.

I put together a high lever pricing process (see below) that I am going to work up into a demo. Overall, I am going to try to put together the story for automating the entire marketing value chain. I think it has a great story leveraging DFSS (Design for Six Sigma) and Stage-Gate and a few other best practices that are out there. More to come…

Continue reading →…

9 Biggest Myths of the Workplace (non-BPM)

May 18, 2007 by George Van Antwerp 0 Comments

One of my favorite bloggers (and authors and speakers) is Guy Kawasaki. He does a great job and his latest blog is no different. This is totally off topic for BPM, but I think it is always a topic that many of us think about – the workplace.

He highlights The Nine Biggest Myths of the Workplace based on the work of Penelope Trunk. It talks about things like the glass ceiling being dead…and not because it’s shattered but because no one cares for whats on the other side. It talks about backstabbing not being what gets you ahead (although we all know that person for which it seems to). It says the average person has 8 jobs before they are 30 (amazing). I think you will like it.

BPM / Process, Healthcare

Healthcare Appeal Process

May 15, 2007 by George Van Antwerp 0 Comments

Healthcare is such an easy target for BPM opportunities. I am living one right now.

In December, we had to refill a prescription for my son. It happened to be 2 days before Christmas. Since I had switched insurance carriers, Aetna now required a PA (Prior Authorization) for the drug (although my son had been on it for a year). By the time, I got the message and tried to call the physician, he (a specialist) was gone until the new year.

I had to fill the prescription and pay cash since I needed my son to stay on the drug. So, in January, I downloaded the appeal form; completed it; had the pharmacist complete it; and mailed it in. In March, I heard back from Aetna that it was rejected. Fortunately, after working in the industry, I know that you can appeal it multiple times, and I understand the coding and reject process. After talking with a call center agent, I had them change some of the notes on the claim to reflect the situation with my physician and appealed it a second time.

It is now May, and I got a letter telling me they haven’t finalized the review process but have received my appeal. I should know something in 60 days.

This has to be easier. All parties have to be frustrated. The Aetna PBM has to spend expensive pharmacist time reviewing these multiple appeals; answering multiple calls by me; and sending me multiple letters. My employer and Aetna will eventually have to pay a claim from 2006. I am out the cash and spending valuable time trying to work the process. And, none of us have much if any visibility into the number of appeals, the average cycle time, the status, and how to change this process.

BPM could help with this in many ways including simply streamlining the process.

eRx with BPM?

May 12, 2007 by George Van Antwerp 1 Comment

From a pharmacy perspective in healthcare, one of the more elusive solutions has been e-prescribing (or eRx). There are numerous companies (e.g., Allscripts, Prematics, Purkinje, RxNT, Zixcorp, iScribe) that have solutions and many more that have died over the years. When I was at Express Scripts, we funded RxHub which was an industry solution by the PBMs (Pharmacy Benefit Management companies) to facilitate eligibility checks and other electronic transactions.

The goal of e-prescribing is to eliminate safety errors associated with wrong prescriptions, drug-drug interactions, non-compliance, and many other issues. Anyone who has ever seen a doctor’s hand written prescription can understand. Here is an example from the Prematics site:

Some of the managed care companies have spent millions rolling out these solutions. In general, most of them are adopted as interesting tools and then disgarded by MDs at the first sign of trouble. Honestly, there is very little in it for them unless they have a quality bonus.

Physicians are one step removed from the filling of the Rx. They care about patient safety, but it is hard to change their working habits.

So, I wondered the other day whether BPM could solve the problem. Doctors all use some type of system for managing their office. This ranges from simple systems that just capture data to much more involved PPMS (Physician Practice Management Systems) or EMR (Electronic Medical Record) systems.

Could a BPMS use a process to:

Push data from the physician’s desktop using messaging queues;
Run the data through some eligibility and adjudication logic;
Identify issues real-time; and
Then either route it back to the MD for questions or send it to the patient’s pharmacy of choice.

An interesting spin on this would be to do an auction at the end where pharmacies could bid on the prescription (e.g., BidForRx). Patients could create customized rules in the BPMS solution that processes the claims and managed the auction based on their interests.

Just a thought. This seems to make adoption easier (no change in process); deployment cheaper (no ongoing support); integration cheaper and easier; and add additional value (patient involvement).

BPM / Process, Healthcare

BPM + Outsourcing not = BPO

May 10, 2007 by George Van Antwerp 0 Comments

Howard Smith says it well in Business Process Management – The Third Wave “What BPM adds to BPO is the capability it gives to partners to retain control of business processes even if they reside partly or wholly with others.”

BPM gives companies a different option for outsourcing. Traditional outsourcing was one of several flavors – task oriented, project oriented, or total process. In general, the runaway successes have been around things like payroll processing which companies like ADP do very well and is not a core competency for many companies. The other successes have been around IT development or call centers where offshore labor is much cheaper (something that is beginning to change).

As companies have outsourced parts of their IT function – development, QA – or some of the customer service functions – help desk, call center, the challenge has always been letting go while maintaining control. I know right now that one of the biggest companies in the US is looking at bringing their call centers back onshore to better manage customer service. I know another company that has outsourced all their billing and most of the customer touch points. Their service is so bad and so different by geography that it is impossible to manage.

Using Business Process Management (BPM), companies can create an overriding process architecture which connects internal processes and external processes. This allows a company to outsource tasks or multiple process steps or subprocesses while maintaining control. Using their BPM technology, the company manages the process flow and the rules while having total process visibility using metrics. This allows them the flexibility to change process as needed. It allows them to manage workload. It allows them to provide an exception process (which is where most things break down). And, it allows the company outsourcing to keep the hard tasks or critical path items internally based on rules-based logic.

So is this really different. I believe so. In most outsourcing deals that I have done, we set expectations and outcome based performance metrics, but we did not control the process steps nor have detailed data on how the company performed each step. Additionally, changing how they did something was difficult because they were lowering our costs by offering a standardized framework across several companies (or simply using lower cost labor). Using BPM for outsourcing, makes the outsourcer more like an internal entity and having an SLA dashboard with system reported data that you can mine. (In some cases, this may be the same as having your functional silos within your company only with process control and management data.)

Why end-to-end process – Volvo example

April 19, 2007 by George Van Antwerp 0 Comments

I can’t verify this example, but I have heard it used multiple times over the years and think it does a great job of making the point about end-to-end process.

At some point in the past, Volvo had apparently manufactured too many green cars. They were sitting on the dealer lots and not selling. The dealers decided to offer a special incentive around green painted cars.

It worked and the cars started selling rapidly. The manufacturing group that was doing planning noticed a spike in sales of green cars and immediately changes the paint orders so that more green cars are produced and sent to the dealers. Hopefully, you see the problem.

We have all had some instance like this occur. The problem is that processes have not been historically connected across functions, business units or even companies. Only an end-to-end process which links planning to inventory to distribution to sales would see the problem. This is one of the values of BPM and one of the challenges.

Today, I can sub-optimize the whole to make my part better. In the future, I have to do what’s best for the seo company and the entire process.

Pricing Lifecyle

April 15, 2007 by George Van Antwerp 0 Comments

A key part of the 4Ps of marketing (price, promotion, product, and place) is pricing. One of the complications with pricing is its lifecycle. The biggest example that we all see around pricing is with airlines. You can pay all kinds of different prices based on supply and demand, time or day that you buy the ticket, and other factors.

But, clothes, for example, follow a more traditional lifecycle where they initially are listed at the “list” price. Over time, you see additional markdowns until either the floor price is hit or the clothes are sold off to the secondary market or sent to outlet stores.

Depending on the company, much of this pricing discounts are very rules based. In some companies, it is more analysis based looking at what is selling and why. This would be an easy process to automate. The rules based discounting process could look for triggers (date, inventory level, etc.) to initiate a pricing discount and then launch a subprocess for updating stores and the system of record. For analysis based processes, the process could link the analysis and the decision making to either automate the steps or potentially automate the decision making as the analysts make their decision making process more transparent.

Lesson From The Apprentice

April 12, 2007 by George Van Antwerp 0 Comments

As one of my favorite shows, I was glad to see another good lesson in this week’s episode of The Apprentice with Donald Trump. One of the three teams just completely bombed the assignment because they had no theme.

As you approach process work or BPM, it is critical to make sure you understand your current state metrics; what is important to drive the business; and how to make a difference. Too many people want to jump right in without understanding the so what (i.e., the theme) of their effort. Finishing a project that missed the mark is as bad as not finishing the project.

Methodology

The Agile Get More Agile

April 5, 2007 by George Van Antwerp 0 Comments

Much like the saying that the rich get richer, I have begun to see more small companies using BPM technology to make themselves more agile. This to me is a good example of Web 2.0. In the late 90s, big companies initially shunned the Internet or approached it skeptically. It rapidly became a basic part of their strategy. Some of the dotcoms became dotbombs because of their business models but not because the fundamental technology was wrong.

I think we are at the same spot. BPM technology is right. It takes BPR (business process reengineering) and BPI (business process innovation) and adds technology to it. The technology enables us to take these new, more agile processes and automate them. Automation creates many things:

Process consistency
Auditability (who did what when)
BAM (business activity monitoring) … dashboards
Reduces paper and improves quality
Lowers cycle time (less hand-offs)
Creates automatic escalations (e.g., someone is on vacation and the task gets routed around them)
Process oriented document management

So, what I find so interesting is that big companies that typically have big problems are once again slow to move on BPM. They are investing heavily in Six Sigma, but they haven’t embraced the correlated subject of BPM which automates and manages the Six Sigma improvements. On the other hand, smaller, lean companies have begun to see how BPM can help them better compete. It makes their processes better. It improves their quality. It allows them to better manage and prioritize. It reduces human intervention and error. It saves them cost and time.

So…the smaller more agile companies continue to gain on the bigger companies while once again the bigger companies are going to wait until they see this threat. (Not all big companies are waiting, but more than you would expect.)

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BPM for Marketing

April 4, 2007 by George Van Antwerp 0 Comments

I have just recently talked with a few clients about using BPM technology in the marketing area. As one put it, this is the one of the last bastions where companies look at process.

That being said, there are lots of opportunities for process management within marketing:

Most marketing groups are involved with new product development. One of the most popular product development methodologies is Stage-Gate. Stage-Gate provides an approach for evaluating products with multiple checkpoints. This can easily be managed via BPM and the company even licenses the process to BPM vendors.
A lot of marketing groups use internal and external resources to deliver on projects. This process could use a tool to manage workloads, track status, and share documents.
The advertising process is filled with ongoing dialog and sharing of information. You can’t always put a process on the creative steps, but you surely can automate and eliminate some of the paper surrounding bidding, creative templates, knowledge sharing, and refinement of the end product.
The entire MRM (Marketing Resource Management) space could be served by BPM. MRM basically is a project / process management approach for marketing specific tasks. There are numerous vendors providing COTS (Commercial Off The Shelf Software) for this.

From what I have seen (and my experience in marketing), this has been an area slow to adopt technology and not on the radar for BPM discussions. So, internally and externally, you may want to engage your CMO (Chief Marketing Officer) and bring them up to speed on BPM.

The E-mail Process

March 30, 2007 by George Van Antwerp 0 Comments

I usually think about applying BPM to paper intensive processes. I think I need to expand that focus to include e-mail centric processes. Not that it wasn’t inclusive before, but talking about it in those terms seems to bring out new opportunities.

Just in the past two days, I have met with a Fortune 100 and Fortune 400 company where this [e-mail] is their process management tool. At the one, their documents are completed and e-mailed around the company for work. If one person in the chain is gone, the whole process is on hold. No one has any visibility to the process and where the work is.

At the other, one person told me that they get 600 e-mails a day because everything – HR, procurement, identity management – are all done by paper forms which are e-mailed around. Again, no visibility to status. No way to escalate if the person is gone.

These are low-hanging opportunities for business process management. With simple use of forms, a basic process, and automated workflow, these processes would be more efficient and controllable. Once you add BAM (business activity monitoring) to the solution, you would reduce cycle time and make staff much more efficient.

BPM / Process, Healthcare, Value Propositions

Creating the automated coach

March 17, 2007 by George Van Antwerp 0 Comments

A typical struggle that a large company has is how to deal with mid-market companies or average customers. Typically national clients or repeat customers get great attention, but it is hard to give this same customized attention to an average customer even if they might be your next big customer.

This challenge is exasperated by the difference between your average customer service or account management professionals and your top performers. How do you embed the DNA of the top performers in that of the average employee.

When I was at Express Scripts, I used to half-kiddingly suggest creating an “automated pharmacist”. All of our clients from individual groups of 200 people to the Department of Defense with 9M members all wanted a pharmacist to provide them with personalized recommendations based on their member demographics and triggered by market events – e.g., Prilosec goes OTC (over-the-counter), Zocor loses patent, a new drug comes to market. There was no easy way to do this.

Additionally, all of us who use the healthcare system want more personalized attention from our physicians, nurses, pharmacists, physical therapists, etc. But, of course, we don’t want to pay a retainer to have them on call. We just want them to somehow manage to give us proactive advice.

Any professional services firm (e.g., accountants, lawyers) has this same challenge. When something changes (e.g., long-distance excise tax), how and when do they communicate this change to all of their clients and help them assess the impact of this change on their business.

Companies with distributors or retail branches have similar challenges from communicating downstream or upstream changes across the different constituents to help them prepare in advance. For example, if your advertising company calls and tells you the ad copy will be 2 days late which means the collateral will be printed 3 days late which means that the supermarkets installing your new display have to shift schedules to have it set up 4 days later…

Well…it didn’t hit me until this morning, but Business Process Management (BPM) technology could help here. We could map these processes til the cows come home, but that won’t do any good. Streamlining these processes, capturing the rules, embedding logic into the process, codifying best practices, and integrating these human and system centric solutions can create this automated intelligence. It is not artificial intelligence but it can help manage your clients and create real personalized value.

Let’s stick with the pharmacy example:

Image that Claritin announces it is going over-the-counter
This trigger from the Pink Sheets kicks off an internal process
The process queries the claims database to identify the number of patients with Claritin claims
The internal process sends an e-mail to all the account teams within your PBM (pharmacy benefit manager – e.g., Express Scripts, Medco, Pharmacare, Caremark, Argus) or MCO (managed care company – e.g., Aetna, Cigna, Wellpoint, BCBS)
Based on rules or election by the account teams a subsequent e-mail is sent to each of the clients
The client can opt-in to a communication to their members
This approval triggers a mail merge of a pre-approved letter which is sent to all the affected members (patients)

This is a service that every client wants. They want the hand holding, but it is hard for large companies to give this to every client. There is not time enough to have all these discussions, talk about customizing the letters, wait on customer approvals, or manage things through e-mail when people are busy and unavailable. A BPM approach to this embeds the logic and creates a personalized flow triggered off key events that can initiate dormant processes that are waiting in the background.

CVS / Pharmacare / MinuteClinic

March 16, 2007 by George Van Antwerp 1 Comment

What a perfect opportunity. CVS (retail pharmacy chain) owns Pharmacare (pharmacy benefit management company) and owns MinuteClinic (onsite medical clinics). Right now, if you went to a clinic or physician or hospital, you have created one customer record. At your retail pharmacy, you have another customer record. The PBM that processes your pharmacy claims has another customer record of you. And, the health plan with which you are affiliated has a fourth customer record of you.

There has been talk for years about Personal Health Records (PHR) or Electronic Health Records (EHR). Although some of the technology exists, the integration and adoption challenges are barriers. That being said BPM offer some of the core benefits. The patient can be viewed as having one customer record that follows their path of care. Each constituent along the way adds information and can view information based on HIPAA guidelines and role based security.

If such a solution made sense, this would create a great opportunity for CVS. They could capture patients at their clinics and learn about them. This information could follow the prescription to the retail pharmacy where they could learn more about the patient. Eventually, they could use the diagnosis data to help inform the treatment suggestions or pharmacy-patient dialog about side-effects. This data could then be integrated at the PBM level to capture other data from mail pharmacy use and other retailers.

CVS could see where people stop taking therapy. MinuteClinic could see where people don’t fill prescriptions. Triggers could be created to generate automatic outbound calls or e-mails or care management calls for follow-up. But, each event is part of a case management framework so they have history and information to build upon each other.

If you leverage some model like this from a CDHC (Consumer Driven Health Care) perspective, you enable the patient to manage their care by setting reminders for refills, electing to have information pushed to them based on diagnosis codes, seeing reports about costs versus payments, and having the ability to track status of open items – labs, payments, prior authorizations, etc. In a competitive industry built around complexity, there is a way to simplify it for the patient.

BPM / Process, Healthcare, Value Propositions

Personality Typing In Venture Capital

March 6, 2007 by George Van Antwerp 2 Comments

Matt Winn, an associate at Chrysalis Ventures, writes a blog with many interesting comments. His blog also points you to several other young VCs who are blogging about different topics.

I thought his blog yesterday about using Predictive Index to assess management teams was interesting as is the original WSJ article about it.

Chrysalis is a very good VC firm that I talked with several times. They are very active in the healthcare space and their managing partner (David Jones) is the non-executive chairman of Humana (and son of the founder of Humana). I would recommend them highly.