Keynote held at JAX 2007 Conference, November 8th, 2007 - Munich, Germany.

1. Business Process Management
From Market Consolidation to Process Innovation
Michael zur Muehlen, Ph.D.
Center of Excellence in Business Process Innovation
Howe School of Technology Management
Stevens Institute of Technology
Hoboken NJ
Michael.zurMuehlen@stevens.edu
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2. Private university, founded 1870
‣ 1800 undergraduate, 2600 graduate students
‣ Located in Hoboken, NJ (across the Hudson from Manhattan)
Four Schools
‣ Technology Management
‣ Engineering
‣ Systems and Enterprises
‣ Arts & Sciences
Rankings:
‣ Top 5 technology management program, on par with Stanford,
MIT, CMU, Babson (Optimize Magazine)
‣ #1 for best distance learning program (Princeton Review)
‣ Top 25 for most connected Campus (Sloan Foundation)
http://www.stevens.edu
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3. Offers MBA in Technology Management, Master of Science
(IS, Telecom Mgmt, Mgmt, EMTM), Bachelor’s Degree
(Business & Technology)
Programs taught on campus and off-site in corporate
locations
Clients: ADP, Avaya, BASF, Bristol-Myers Squibb, Chubb,
Citigroup, Deutsche Bank, J&J, Lockheed, Merrill Lynch,
PaineWebber, Pearson, Prudential, PSE&G, UBS, UPS,
Verizon and others
Research centers with focus on
‣ Process Management
‣ Project Management
‣ Product Innovation
http://howe.stevens.edu
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4. What this Talk is About
How has the field of BPM evolved?
Rules + Processes: The Next Frontier
Standards: Who needs them and what do they offer?
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5. User Conceptions
about BPM
Abstract
Restrictive
It’s not Excel
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6. Too Abstract
Process thinking requires a lateral view of the
organization
Process thinking requires to generalize from
the day-to-day business
Process thinking is expressed in (semi-)
formal notation
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7. Too Restrictive
Try modeling the following:
Manufacturing can start anytime after the payment
from the customer has been received
An inventory check, a credit check, and a
regulatory check have to be performed - in any
order
After quotes from 3/4 of the eligible suppliers have
been received, or after three days (whichever is
earlier) a selection is made
Users tend to think in “If-Then”
scenarios
g
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8. It’s not
Excel
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9. Types of BPM Projects
“Let’s model everything” (aka I just learned BPMN)
“Let’s try this out first” (aka I don’t trust BPM)
“SOA first, let’s figure BPM out later” (aka I love acronym soup)
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10. “Let’s model everything”
Develop a Process
Architecture for the
enterprise
Maintain comprehensive
process documentation
Motivation
Compliance Requirements
Developing Global Standards
Mergers and Acquisitions
“We like to model”
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11. Top-Down Strategy
Level A
Business Activities Business Activities
Strategy
Objectives Scorecard Strategic
Process
Level B Description
Top-Down Project
Process Groupings Process Groupings Ownership Services
Level C
Core Processes Tactical
Core processes Delivery Units Products
Process
Level D Description
Business Process Flows
Processes Delivery Teams Systems
Level E
Operational Process Flows
Operational
Sub Processes Roles System Functions
Process
Level F Description
Detailed Process Flows BPM Application
Detailed Processes Detailed Roles Transactions
Source: British Telecommunications plc 2006
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12. “Let’s try this out first”
Chooses a pilot process to gain experience with BPM
Good: Choose high-value, low-medium risk business case
Example: Onboarding, Claims Processing
Bad: Choose no-value, no-risk business case
Example: Complaints handling, Expense reimbursement
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13. First Generation BPM Case
Midwestern Life and Health Insurance Company deployed a
FileNet Image and Workflow system in underwriting in 1995 to
reduce elapsed time to issue policies
reduce costs
and empower the underwriting area to make changes in their
workflow with minimal I/S involvement
The company achieved objectives 1 and 2 but the customer
found it too hard to make changes and turned it over to IT.
IT relied on Visual Basic since this was the familiar tool to the
IT staff and eventually the system became hard to change.
(Hardening of the workflow arteries).
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14. Now: BPM as Industrialization
Paper Trading
Order Acct. Mgmt.
Phone
Management
Process
Fax Payments
E-mail Complaints
Production Management
Transparency
Input Channels Automation, but only if not Job Types
too complex / rare
other regulatory requirements
no economies of scale
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15. Example: Back Office
Search processes using
‣technical and
‣business criteria
Display shows
‣status
‣start time
‣end time
‣instance data
Drill Down is possible
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16. Example: Back Office
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17. “SOA first, let’s figure it out later”
Establish basic services, ESB
Try to identify processes that can leverage the services
Problem: Without processes there is no point of reference for
services abstraction, granularity
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18. What are you really good at?
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19. From Core to Commodity
Treat the process as a service
Define a standard interface
Think about creating value outside
and at the front-end
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20. Learn from Outside
Usage-based Insurance applies Telecom Billing
Techniques
Progressive: Autograph Prototype ‘99-’01
Norwich Union:
Free GPS
Rate depends on mileage driven
Precondition: Flexible billing process
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21. Underwriting On Demand
Text2Insure: Provide Travel and Car
Insurance via SMS
Provides Quote within 60 seconds
Reply “BUY”
Call from agent within 10 min for
payment details
Cover2go: Accidental Death
Insurance
Fees taken from cell phone bill
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22. BPM
Evolution
Products
Academia
Standards

23. M&A
Staffware TIBCO
FYI Global360
Proforma Metastorm
Filenet IBM
Carnot Sungard
...
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24. Tool Features
Modeling Simulation
High-End Basic
Implementation Enhanced
Execution Rules
Human-Centric BRE Call
EAI-Centric Decision Tables
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25. From Simulation to Optimization
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26. Rules + Processes
Control Flow Decisions
Assignment Decisions
Monitoring of Policies and
Exceptions
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27. Managing Change
Claims processing at major US Insurance company
12 Process Steps
>5,000 Business Rules
What do you think changes faster?
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28. How many rules exactly?
>90 product types and their associated product rules
>700 data edit rules
>70 claim pending rules
>200 types of correspondence letters
>250 claim processing and payment approval authority rules
>70 claim quality review sampling rules
>1,000 special client claim handling rules
>2,000 federal/state regulatory rules
>850 accounting rules
>600 published claim processing guidelines
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29. Control Flow Decisions
Using Business Rules Engine to make data-based decisions about
the sequence of processing steps
From Workflow: Workflow-relevant data
From BRMS: Branching decision
Useful if multi-criteria decisions are needed
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30. Simpler Processes
Loos (2007)
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31. Multi-Step Decisions
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32. Decision Rules
Example Applications
Customer Contact Scripts
Validation of data before processing
Complex decision scenarios
Mining of rule criteria from runtime data
Model process with high fidelity
Run process and record audit trail
Apply statistical analysis techniques to uncover correlation between
process data and process path
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33. Assignment Decisions
Use BRMS to route work to the most qualified performer
From Workflow: Assignment-relevant Data
From BRMS: Identifier of qualified resource(s)
Useful if assignment decisions are made based on data of the
workflow object
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34. Original System
1. Application is 2. Data is entered 3. Application is assigned 4. Underwriting
scanned into Into Admin to Underwriter during Begins
FileNet. Systems. indexing process.
Network
FileNet Administrative Workflow
Image System Systems
5. Workflow and associated route work through the business process based on the kind of policy.
source: Royce (2007)
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35. Sample Rule
If channel equals agency,
and plan equals mortgage term or whole life,
and region equals Midwest,
and age is greater than 18 and less than or equal to 65,
and face amount is more than $250,000 and less than $1,000,000,
and policy is a conversion from existing policy
Then assign to Midwest Level 1 Underwriter Group.
No Channel Region Age Face Amount Conversion? Assignment
250,000 Midwest Level 1 Underwriter
1 Agency Midwest 18<=65 <=1,000,000 no Group
East Level 2 Underwriter
2 Brokerage East 18<=65 >=1,000,000 yes Group
3 Agency South 18<=65 <250,000 no Underwriter Assistant Group
source: Royce (2007)
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36. Rule Engine Driven Assignment
1. Application is 2. Data is entered into
3. Applications are distributed based 4. Underwriting
scanned into Admin Systems and
on availability and skill level Begins
FileNet. used by Rule Engine.
and Admin Systems Are Updated.
Assignment
Engine
Network
FileNet Workflow,
Administrative
Image System Rule Engine and Robot
Systems
source: Royce (2007)
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37. Cross-Process Policies
Use BRMS to coordinate across process instances
Example: During labor action, hold all non-critical orders
Requires API for process control at the BPMS level
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38. Actions & Alerts
Rules
Engine
KPI Evaluation
Process Goals
Metrics Thresholds
Risk Mitigation
Email and
Cellphone
Actions notification
Web Service Call
or
Execute Script
Process
Event
Action Schedule Triggers
Shapiro (2007)
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39. Moving to Exception Based
Underwriting Underwriter reviews APS’s
and some complex cases
Rule Engine validates
App is Scanned Data Entry Application information
and OCR’ed And Validation and Issues some policies
24/7 Issue System Admin System
Imaging System Workflow
and Rule Engine
Expanded Rules with Automatic Interface Producer
functionality may include: receives policy
Straight-through processing for delivery.
Intelligent requirement processing
source: Royce (2007)
Automated issue
Minimized admin system entry
Auto Issue of Policies 39
Workload Balancing

40. Standards?
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41. Business Process Innovation Business Process Management
Notation
Standard
Integration
Standards
Audit
Standards
Interaction
Standard
Standards
Metrics
Business Process Monitoring Business Process Automation
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42. The Workflow Reference Model
BPMN
Process
Definition Tools
XPDL
Interface 1 Process Definition Import/
Export
Interface 5 Other Workflow
Workflow Enactment Service
Enactment Service(s)
Administration & Monitoring
Tools
Workflow Wf-XML
BPEL
Engine(s) Workflow
Engine(s)
Interface 2 Interface 3 Interface 4
Interoperability
SOAP
Tool Agent
Client Worklist
Apps Handler
Invoked Typically
Applications
Web Services
see: www.wfmc.org/standards/docs/tc003v11.pdf

43. + Pool, Lane, Grouping,
Annotation, Transaction
Boundary...
Example: BPMN 1.0
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44. BPMN 1.1
Mainly cosmetic changes
New symbol for Multiple Event
and Gateway (used to be star)
New Signal Event
Separation of “catching” and
“throwing” events
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45. 0
30
60
90
120
Normal Flow
Task
End Event
Start Event / Event
Pool
Data-Based XOR
Start Message
Message Flow
Text Annotation
Parallel Fork/Join
Gateway
Lanes
Sub-Process (Collapsed)
Association
Data Object
Intermediate Timer
End Terminate
Intermediate Message
Sub-Process (Expanded)
End Link
Default Flow
Inclusive Decision/Merge
Activity Looping
'exception' task
End Message
Start Link
End Exception
Complex Decision/Merge
Event-Based XOR
Group
Multiple Instance
Intermediate Event
Transaction
Compensation
Conditional Flow
Practical Use of BPMN Symbols
End Cancel
Exception Flow
Intermediate Compensation
Source: Sample of
120 BPMN models
Intermediate Link
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Start Timer
End Compensation

46. Design Interchange vs.
Executable Format
Design XPDL Design
Tool A Tool B
BPEL, BPEL,
XPDL, This path XPDL,
or some not or some
engine X engine
specific generally specific
format supported format
Execution Execution
Engine A Engine B
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47. Process Design Ecosystem
Modeling Vendor A
Tools
Optimization Simulation
Tools Tools
Repository
Vendor C (XPDL)
Design Design
Tool Tool
BPEL BPEL
B
or some or some
Ven
dor
engine engine
specific specific
dor
Ven
format format
D
ASAP
Execution Execution
Engine Wf-XML Engine
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48. Business Process Definition
Metamodel (BPDM)
Designed to supplement BPMN with a formal metamodel of its
modeling constructs
BPMN 1.0 did not contain a formal metamodel specification
OMG mindset of MDA is based on multiple levels of metamodels
BPDM replaces efforts to create a UML profile for BPMN
BPDM contains more constructs than BPMN 1.0/1.1
Mapping to MOF and XMI
Envisioned to become persistency format for BPMN
BPMN 2.0 = BPMN + BPDM + possibly other notations
There may be a UML profile for BPDM
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49. Universal Behavioral Happening
Succession between
Behavioral Change Part
Universal Behavioral Happening
End
Start Finish
Behavioral Change
Error
Part typed by the
“Start” Change
Abort
The “Universal Behavioral Happening”
is in the M1 Library of BPDM
is the super type of all processes and choreographies
is the default type for all process steps and choreography steps
source: modeldriven.org
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50. Behavioral Step 1 predecessor successor
Behavioral Step 2
Processing Successions between steps can specify
The Behavioral Change that originated them
The Behavioral Change that they trigger
All combinations are then possible
End -> Start (the default)
Abort -> Start
Error -> Start
Start -> Start
Start -> Abort
…
source: modeldriven.org
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51. Example
Universal Behavioral Happening Universal Behavioral Happening
End End
Start Finish Finish
Start
Error Error
Abort Abort
predecessor successor behavioral
behavioral change change part
part
behavioral happening type behavioral happening type
Behavioral Step 1 predecessor successor
Behavioral Step 2
source: modeldriven.org
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52. SBVR
Semantics of Business, Vocabulary and Rules
Formally defined taxonomy to describe elementary business
operations and rules
Meta model expressed in UML
Business-level specification aims at enterprises to formally express
their operations
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53. Example: SBVR Rules
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54. Users don’t care about
standards per se, but about
their value proposition
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55. Your Service Interfaces
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56. Your Business-level Services
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57. Your Process Interface
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58. Thank You – Questions?
Michael zur Muehlen, Ph.D.
Center of Excellence in Business Process Innovation
Howe School of Technology Management
Stevens Institute of Technology
Castle Point on the Hudson
Hoboken, NJ 07030
Phone:
+1 (201) 216-8293
Fax:
+1 (201) 216-5385
E-mail:
mzurmuehlen@stevens.edu
Web:
http://www.cebpi.org
slides: www.slideshare.net/mzurmuehlen
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