A Holistic Approach to Business Process Management ... - Cognizant

• Cognizant 20-20 InsightsA Holistic Approach to BusinessProcess Management: This Way toBetter Customer ExperienceExecutive SummaryBusiness process management (BPM) isincreasingly helping companies reduce costs,improve efficiency, nurture innovation and getcloser to customers. As the name suggests,BPM is the practice of optimizing and refiningprocesses from end-to-end to promoteefficiency and increase customer value. Companiesof different sizes from the full range ofvertical industries can use thoughtfully appliedBPM to further their business goals.In fact, leading analyst firms identify BPM asamong the top technology trends. According to aFebruary 8, 2011 blog post by Forrester ResearchVice President and Research Director ConnieMoore entitled, “Tackle The Most Common BPMChallenges,” “BPM projects typically deliver30% to 50% productivity gains for processesinvolving back-office and clerical staff, and theytypically deliver 15% to 30% productivity gainsfor processes involving knowledge workers.”Organizations and business units are now lookingto BPM to enhance business processes to providemaximum customer value.Executed well, BPM carries a number of businessbenefits:• Operational cost savings: Automating manualprocesses eliminates waste, improves efficienciesand increases accuracy. Automated processesrequire the involvement of fewer peoplein the organization. Training costs go down,especially for CRM systems. Companies thatare successful in their BPM approach typicallysee a significant overall cost improvement.• Improved sales opportunity: Optimizingend-to-end sales processes boosts the valueprovided to prospects and customers.• Greater customer satisfaction, leading tohigher customer retention: Fundamentally,BPM is about improving business processeswith the aim of providing a better customerexperience. Moving the organization towardcustomer centricity boosts customer satisfaction,which means customers will be less likelyto defect to competitors.This white paper will help you understand howto holistically deploy BPM. It will demonstratea proven way to assess where BPM fits in yourenvironment, how some companies are leveragingBPM to streamline and automate key businessprocesses, and new and emerging technologiesthat effect how BPM services are delivered andconsumed.BPM in Your OrganizationMost businesses and other organizations areorganized around disconnected business functions,cognizant 20-20 insights | march 2012

Getting all youremployees tothink about thebigger picture,from the originof the businessprocess to whereit touches theend customer, is amajor challengein BPM.such as sales, marketing, production, customerservice, research and development, operations,finance, HR and the like. This siloed, or functionbased,organizational structure originated at thedawn of the Industrial Age when it was the mostefficient labor arrangement in a non-automatedworld. Today, however, organizationsare largely automated.This means that any businessprocess delivering value tocustomers tends to crossfunctional boundaries. Unfortunately,employees rarely lookbeyond their functional silos tosee how work that touches thecustomer is conducted withincorresponding functions withinthe organization. This is problematicas high-value businessprocesses naturally reside witha larger, cross-functional wayof working. Getting all youremployees to think about the bigger picture, fromthe origin of the business process to where ittouches the end customer, is a major challengein BPM.A necessary starting point for effective BPM is tomove the organization from functional thinking(with its associated organizational chart) to aprocess mindset (with a process-driven hierarchy).Often, this requires peelingWe find thereis an art as wellas a science toselecting the firstbusiness processesto optimizevia BPM.Cornerstones of BPMdecades of firmly entrenched,out-of-date work patterns andpractices from executives whocannot imagine any otherway of getting work done.The transition to customercentricity that underlieseffective BPM can shake thebusiness to its foundation.In our experience, many companies do notapproach BPM holistically. The temptation is tofocus exclusively on process automation andconsider the BPM program successful with eachincremental bit of automation achieved. Unfortunately,this limited approach can result in implementationof many different point BPM solutionsthat do not generate business benefits. That isbecause no one stopped to define the businessbenefits before implementing the tool. Companiesoften architect themselves into a corner becausethey did not take a top-down approach to BPM.This is a multi-functional effort that must start bytaking a higher view than just what one tool canachieve. In our view, there are three cornerstonesof BPM:1. Process Engineering: When companies launcha BPM program, the purpose is to achievebusiness goals, not IT goals. In fact, anyattempt to cost-justify a BPM project must becharacterized at the most basic levels in termsof revenue gained or profitability boosted,or the effort will not garner the requisitelevel of executive support. The first step of atransformational BPM program, therefore, isto identify the business goals to be achieved.In our experience, many companies startwith the goal of improving overall customerservice. The next step is to identify the metricsand key performance indicators (KPIs) thatrelate to the business goal. Here, applicablemetrics would include customer satisfactionscore, percentage of customer service eventshandled through self-service channels andfirst-call resolution.With the metrics clearly categorized, the nextstep is to identify processes that drive thesemetrics. This requires identifying processesthat add value for the customer. We find thereis an art as well as a science to selecting thefirst business processes to optimize via BPM.You will want to look for a manual process thathas a high profile within your organization.At the same time, this process must be ableto yield easily demonstrable business benefitsthat can be achieved fairly quickly. We workedwith an insurance provider, for example, thatbegan with claims processing. The next stepis to study the inefficiencies in the existingbusiness process (the “as-is” process). Then,you prepare a recommended reengineeringof the business process (the “to-be” process).The end product of this stage will be a set ofprocess diagrams and process flows.2. Process Automation: In the second phase,you convert these process diagrams into code.This is where your BPM solution comes intoplay. Your tool will automate the previouslymanual process. For example, take the scenarioof a customer calling his credit card companyto dispute a transaction. The call center agenttakes the details of the dispute and then,depending on the transaction amount, theagent will be automatically authorized to givethe caller a credit or to investigate the mattercognizant 20-20 insights 2

In our experience,most companiesfail to do anadequate jobof measuringbusiness benefitsattained.One effectiveapproach is to“test-drive” cloudBPM, or create aproof of conceptto determine itsviability in yourorganization.further. Without automation, the agent in thecall center would have to manually go throughthe rules with the customer onthe phone and decide whetherto issue the credit, burdeningthe customer by making him waiton hold. Automating the processmeans the decision-making onthe rules can be made automatically.Under the automatedprocess, the embedded businessrules could dictate that if thedisputed amount is under $100and the customer is a platinum card holder, thecredit should be granted immediately.3. Process Optimization: At the end of theprocess automation phase, the company willhave newly automated processes. But stoppingthere is not advisable — the critical next stepis to measure if the automated processeshave achieved the expected benefits. Youhave to compare the automated processesagainst your target metrics. If there is agap between the two, you will have to go backto your process engineering phase (Step 1)and do more work before proceeding againto process automation (Step 2), finishing withStep 3 (measurement). In our experience,most companies fail to do an adequate job ofmeasuring business benefits attained. Theyfall short of determining whether or not theprogram was successful.Case Study: BPM in the HealthInsurance IndustryIn 2009, we were asked to implement a call centerstrategy for a major health insurance provider.The engagement started with a thorough examinationof current call center processes, theclient’s overall goals for customerservice, what it wanted to achievefrom a business standpoint andhow to map to current processes.We reengineered the processesto eliminate inefficiencies andincrease customer satisfaction.Key drivers for what becameknown as the customer servicedesktop solution included a moveto a future-ready platform and aretail-focused business organization.We reviewed the existing customer serviceplatform and developed a business solutionand enabling technical solution. Our approachensured budget and scheduling compliance. Werecommended that development of the customerservice platform leverage offshore resources toreduce costs and accelerate the timeframe. Weestimated this BPM project would have an activetimeframe of about three years and a paybackperiod of roughly six years. In addition, the insurerwould see a reduction in training time by 30%,an increase in efficiency and an improvement infirst call resolution by 25%. In addition, call centeragents would have greater visibility into customerdata, resulting in a more consistent customerexperience across channels.We planned a multi-year, phased approach forthe health insurer that would provide iterativebusiness capability delivery with subsequentphases building on initial work. We estimated wewould save the insurer more than $10 million overits estimated customer service platform development,based on our experience in implementingcomplex BPM initiatives.Current Technology Trends and BPMRecent technology developments are significantlyaffecting how BPM is delivered. It is worthtouching briefly on these topics, including theeffects of cloud computing, mobility and socialmedia.Cloud computing sprang from organizations’need to reduce IT implementation and total costof ownership. The promise of operating applicationsvirtually in the “cloud” is that there is noneed for upfront capital investment in hardwareor software, and there is often a monthly subscription“pay as you go” model. This is unquestionablya very powerful value proposition for companiesof all sizes today. However, the largest companies,especially those in industries such as banking andfinancial services and healthcare, are cautiouslyexploring the cloud model due to security and datagovernance concerns (see sidebar, next page).These concerns have similarly impacted adoption ofcloud-enabled BPM. Solutions providers aretightening up the security of their offerings, soit is likely only a matter of time before cloud willbe a viable option for most organizations’ BPMefforts. One effective approach is to “test-drive”cloud BPM, or create a proof of concept todetermine its viability in your organization. This willhelp determine:• How employees will access the cloudinfrastructure.• Security measures to ensure data privacy.• Whether partitioning of data is needed.cognizant 20-20 insights 3

Today, any discussion of technology is incompletewithout the addition of mobility, and this istrue in the case of BPM. When using BPM inthe context of process automation aroundcustomer relationship management (sales processmanagement), for example, salespeople standto benefit greatly if their processes are integratedwith their mobile devices. Information at theirfingertips means salespeople are ready to helpwith customer queries on the fly, better servingthem.In the CRM context, BPM is all about optimizationof processes between different stakeholders —different departments, suppliers, trading partnersand customers. Social BPM is all about collaborationso social media should be leveraged.For example, an insurance company’s call centermight need to monitor conversations on socialnetworking sites in the case of a public relationsissue to be better prepared to deal with customercalls.Done well, BPM is one of the surest paths thereis today to getting closer to your customers. Ifyou follow a holistic, multi-phased approach asdescribed above, you can be sure of achieving theexpected business benefits.Is Cloud BPM Secure Enough?Running applications in the cloud, rather thaninstalling them on premises, is as attractivea notion for BPM as it is for other types ofapplications. You can avoid buying hardwareor software outright, you escape having todeal with installation or maintenance and theprovider handles the upgrades.But executives in risk-averse industries suchas banking and financial services are rightfullyleery of sending their sensitive data to thecloud, where they will lose direct control overit. Data governance (who owns the data?) isa concern, but information security is evenmore pressing.If you’re interested in taking the plunge intocloud BPM — or at least learning more aboutit — you’ll want to ask your services providerthese key questions:• How do you physically secure my data?If the provider doesn’t have modern andsecure facilities, there’s no need to askany more questions. Move on to the nextprovider. Physical security is important,including on-site security personnel, videosurveillance, intrusion detection, restrictedentry and the ability to demonstrate howthey provide it.• How is my data encrypted? Data encryptionis crucial, and you need to hear detailsabout the provider’s encryption methodsand policies.• Where will my data be stored, and will itbe replicated at other data centers? Onepremise of cloud is that the location of datashould not be a concern for the user. Manyenterprises, however, must comply withregulations that are based upon the data’sgeographic location. Companies need toreview these requirements with vendors.• What investments are you making tosecure my data? You want to be suresecurity is a constant focus for the providerwhere they will think ahead for you andmake it one less thing for you to worryabout. Are the provider employees trainedand skilled in security and encryption?Does the organization have technology todetect if your application is under attack?What response times does the provideroffer if an attack does take place?• Is your cloud computing service SAS70 compliant? Compliance with the SAS70 standard by itself is not proof positiveof adequate security, but it does at leastdemonstrate that the provider has theappropriate safeguards and processes inplace to protect your IT assets.cognizant 20-20 insights 4

About the AuthorDilip Balakrishnan is North American Director and Head of Cognizant’s BPM Practice. In this role, he isresponsible for setting and executing the company’s BPM services strategy in North America, managesa team of BPM consultants who provide specialized BPM services to strategic customers and managesCognizant’s relationships with all major BPM product vendors. Dilip has 18-plus years of experience inbusiness consulting and IT services, the last 12 years of which he assumed ever-increasing responsibilitiesfor Cognizant in business consulting, client and account management, large services programmanagement and practice management. He has an undergraduate degree in engineering and a postgraduatedegree in business management. Dilip can be reached at Dilip.Balakrishnan@cognizant.com.About Cognizant’s BPM PracticeCognizant’s BPM practice specializes in BPM business analysis, consulting and testing. We have3,200-plus BPM workflow architects, developers, testers and consultants working on more than160-plus in-flight BPM projects facilitating process automation involving multiple system components.Our “person years” of BPM project experience exceed 8,000. We have a dedicated BPM Center ofExcellence featuring a repository of best practices and other reusable assets.About CognizantCognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcingservices, dedicated to helping the world’s leading companies build stronger businesses. Headquartered inTeaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industryand business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50delivery centers worldwide and approximately 137,700 employees as of December 31, 2011, Cognizant is a member ofthe NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performingand fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.World Headquarters500 Frank W. Burr Blvd.Teaneck, NJ 07666 USAPhone: +1 201 801 0233Fax: +1 201 801 0243Toll Free: +1 888 937 3277Email: inquiry@cognizant.comEuropean HeadquartersHaymarket House28-29 HaymarketLondon SW1Y 4SP UKPhone: +44 (0) 20 7321 4888Fax: +44 (0) 20 7321 4890Email: infouk@cognizant.comIndia Operations Headquarters#5/535, Old Mahabalipuram RoadOkkiyam Pettai, ThoraipakkamChennai, 600 096 IndiaPhone: +91 (0) 44 4209 6000Fax: +91 (0) 44 4209 6060Email: inquiryindia@cognizant.com© Copyright 2012, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by anymeans, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein issubject to change without notice. All other trademarks mentioned herein are the property of their respective owners.