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2010-IBM

Business Process Management Enabled by SOA

Agenda
BPM overview The life cycle of BPM Case study References

Innovation drivers and their barriers


Businesses want change at the speed of business. Is yours an innovation-driven business?

What do CEOs say about business model innovation?


Organizations are bombarded by change, and many are struggling to keep up. Eight out of ten CEOs see significant change ahead, and yet there is a gap between expected change and the ability to manage. CEOs view more demanding customers not as a threat, but as an opportunity to differentiate. CEOs are spending more to attract and retain increasingly prosperous, informed, and socially aware customers. Nearly all CEOs are adapting their business models: two-thirds are implementing extensive innovations. More than 40% are changing their enterprise models to be more collaborative. Process management facilitates organizational change supporting innovation.

What is a business process(1)?


If you search the Web for a definition of business process, you find many definitions. All these definitions contain certain common elements:
A business process is triggered by a business event. A business process has an input and creates an output that is of value to the organization, its stake holders, or its customers. A business process is composed of related structural activities. Material and/or information flows between the process activities. A business process can be part of a larger process and can include or depend on other business processes. A business process can be viewed as the workflow for a use case. A business process usually depends upon several business functions for support, for example, IT, personnel, and accommodation.

What is business process(2)?


A business process consists of activities or tasks that transform information from one form to another to achieve a business outcome.

Business process components


Business items are business documents, work products, or commodities that are transformed in business operations. Resources represent the people, equipment, or material used to perform a project or a task, including things that are performing the work or are required prerequisites for this work, such as machines, fuel, vehicles, or skilled personnel.

Process decomposition

Order handling process flow

Embedded process

Business process type


Management processes used to manage system operations. Operational processes used to provide core business functions, which is often used interchangeably with the term business processes. Supporting processes that provide support for the other process types (for example IT support).

What is business process management?


Business process management (BPM) leads to business innovation and optimization by implementing business strategy through modeling, developing, deploying, and managing business processes throughout their entire life cycle. Business process management combines business processes, information, and IT resources, aligning your organization's people, information technology, and processes to create a single integrated view of both its business measurements and IT system performance.

Why is business process management needed?

CIO

BPM is About Value not Technology


BPM Defined: An integrated approach to aligning the key activities of an organization into processes you can consistently measure to optimize value to your organization and its end customers. Integrated
Technology + methodology Compresses cycle time for process lifecycle Enabled by BPMS platform

Processes
Align people & tasks to valuable outcomes End-to-end vs. silo Cross-functional

Measure
High visibility into performance of process & people Metrics that are meaningful to the business Quantify impact of process improvements

Optimize
Enhance process to maximize business value Identify & remove bottlenecks Eliminate non-value-add activities

BPM #1 on Gartner 2010 CIO Agenda

Business expectations and CIO strategiesa continued focus on business process improvement, cost reduction and analytics
(Source: Gartner 2010 CIO Agenda Exec Summary)

Needs for business process management


Economics: globalization demands flexibility Business processes: change quickly and sometimes outsourced Growth: at the top of the CEO agenda Reusable assets: can cut costs Information: greater availability Crucial for flexibility and becoming an On Demand Business

Benefits of BPM
BPM allows for an enterprise to be flexible and responsive to the ever changing on-demand business through the optimization and automation of the business processes to:
Identify and eliminate redundancies and bottlenecks Reduce risk by gaining an understanding of process impacts prior to operationalzing Decouple business integration logic from its underlying implementation code Increase portability and decrease maintenance cost by being based on industry standards Automate process implementation, eliminate manual deployment tasks Immediately execute new business rules and processes Visualize actual process performance against key performance indicators Pinpoint future process improvements

Agenda
BPM overview The life cycle of BPM Case study References

WebSphere BPM high-level product architecture

End-to-end business process lifecycle


Model and simulate a business process. Define key performance indicators. Develop and test an application to implement the business process. Deploy and run the application on a server. Monitor the application to observe pre-determined key performance indicators. Import the observed data to make required revisions to the original process model in the Modeler.

The life cycle of BPM(1)

The life cycle of BPM(2)


The life cycle of a business process spans identifying and improving processes that deliver business capability to deploying and managing the process when it is operational. What is often forgotten about is managing process performance after a process is operational. After a business process is deployed, it must be managed, and, to manage the business process, you must have visibility into process performance. When a process is no longer meeting its performance goals, it is time to jump back in the life cycle to assess the root cause of the performance problem and to look for additional improvement opportunities.

Traditional business process

Business process is embedded in three or four separate applications Business functions are tightly coupled within applications Business functions have unique and proprietary interfaces, restricting re-use Manual steps introduce functional gaps in the process Process cannot be easily measured or managed Changes to the process are difficult to implement

On demand flexibility: Customer self-service

Customers now order online using a Web browser and the Internet Business partners can enter an order using a call to a Web service from their own business processes Customers are better served

On demand flexibility: Shared services

Common business functions are shared across the enterprise Marketing, Billing, and Receivables are handled uniformly Enterprises can scale across divisions and lower costs

On demand flexibility: Vendor managed inventory

Minimize or eliminate inventory management function Costs are reduced because less inventory is needed Inventory servicing is better because of supplier integration with the process

On demand flexibility: outsource

Shipping is not a core competency Shipping companies (FedEx, DHL, UPS, for example) have more capabilities Reduce shipping infrastructure and overhead costs

Flexible business demands flexible IT

Barriers to business flexibility and reuse


Lack of business process standards Limited architectural policy Point application Purchases to support redundant line-of business needs Infrastructure built with no roadmap

Why are interfaces so difficult to maintain?


Application logic becomes intertwined with business logic The tighter the integration, the more difficult it is to change the application logic The more interfaces there are in a set of programs, the more complex the application becomesinterface logic may exceed application logic In such circumstances, reuse becomes difficult and impractical SOA is the architecture for solving this.

SOA-based business process management

Business process management life cycle


IBM customers take a lifecycle approach to SOA. SOA is best considered in terms of an iterative process. It is best to use this lifecycle approach tactically, focusing on the sections that provide the most value for the given system. The SOA lifecycle contains the following phases:
Model phase: Gather business requirements, then design, simulate, and optimize the desired business processes. Assemble phase: Implement the system by assembling newly created and reused services to form composite applications. Deploy phase: Deploy assets in a secure and integrated environment, taking advantage of specialized services that provide support for integrating people, processes, and information. This level of integration helps ensure that all the key elements of your company are connected and working together. Manage phase: Manage and monitor the composite applications and underlying resources, from both an IT and a business perspective. Information gathered during the Manage phase is used to gain real-time insight into business processes, enabling better business decisions and feeding information back into the lifecycle for continuous process improvement. Underpinning all of these lifecycle stages is governance, which provides guidance and oversight for the SOA project.

What is Service Oriented Architecture

BPM Architecture Enabled by SOA

BPM Lifecycle Enabled by SOA


BPM life cycle stages: model, assemble, deploy, manage WebSphere products that support each stage WebSphere Business Modeler, WebSphere Integration Developer, WebSphere Process Server, WebSphere Business Monitor

Business process modeling value


Provides a common language for effective business and IT collaboration Allows people who know the business to model the business Business-focused users understand and transform their businesses through advanced business modeling, simulation, analysis, reporting, and collaboration capabilities Understanding business models can increase return on investment
Add business measures to define key performance indicators (KPIs) Add metrics that measure business process performance Integrates with WebSphere Business Monitor to report on process performance

IT-focused users export models to multiple development environments to jump-start workflow and application development Business View IT View

Business Analyst

IT Architect

Developer

Process modeling
A business process model is a visual representation of a process that contains supporting information:
Documenting existing procedures Determining requirements for staff, systems, and facilities Planning changes to existing processes and systems Testing and analyzing existing and proposed processes

Business process modeling(1)


Customers model processes for many purposes: Modeling For Compliance/Documentation Modeling For Redesign Modeling For Execution
(BPMN) (As-Is) IT(To Be)

WebSphere Business Modeler

Business Process modeling(2)


Simulation and analysis of processes Assess impact of model changes on costs, resource utilization, and cycle times
Reduce risk by simulating market changes against current process models
Predict risks before promoting to production Save cost of production deployment Build reliable solutions

Define Key Performance Indicators Measurement is the key to management


Effectively utilize valuable skilled resources

Update process models from real-time instances running in production Documented, auditable process models Achieve regulatory compliance In less time and at lower expensecreate new business process models with Modeler and document in one tool

Business Process modeling(3)


WebSphere Business Modeler provides a common language for effective Business and IT collaboration Business-focused users understand and transform their businesses through advanced business modeling, simulation, analysis, reporting, and collaboration capabilities:
Understanding business models can increase return on investment Add business measures to define key performance indicators (KPIs) Add metrics that measure business process performance No coding required Integrate with WebSphere Business Monitor to store the values of the business measures and metrics to report on process performance

IT-focused users export models to multiple development environments to jump-start application development

Business process simulation(1)

(ROI)

WebSphere Business Modeler

Business process simulation(2)


Continuous process improvement Monitor real-time business process instances Real-time data exports back into Modeler Make process modifications based on simulation results View real-time performance Key Performance Indicator scorecards Track cost, time and resourcesIdentify bottlenecks Balance workloads Intervene in deployed processes Set situational triggers and notifications Dynamically respond to these alert

Business process assembling1


WebSphere Business Modeler WebSphere Integration Developer

WebSphere Business Modeler

WebSphere Integration Developer

Business process assembling2


BPEL Process
Java Application Human Task Enterprise Application State Machine

get Approved Approved/ Denied

Business Rules

If Approved then Send letter offering gold If NOT Approved Send letter offering Credit counseling service

WebSphere Integration Developer

IT

WebSphere Integration Developer


WebSphere Integration Developer can assemble the components into an SOA application and then deploy the enhanced, optimized, and integrated process into WebSphere Process Server.

Business process deploying

WebSphere Process Server

Service Components

Business Business Processes Processes

Human Human Tasks Tasks

Business Business State State Machines Machines

Business Business Rules Rules


Dynamic Dynamic Service Service Selection Selection

Supporting Services & WS ESB SOA Core

Mediation Mediation Flows Flows (ESB) (ESB)

Business Interface RelationObject Mediation Flows Mediation Flows Maps ships Maps

Service Component Architecture

Business Objects

Common Event Infrastructure

WebSphere Process Server

WebSphere Application Server ND (J2EE Runtime)


*1Q 2007

Business Activity Monitoring


Business activity monitoring refers to the aggregation, analysis, and presentation of real time information about activities inside organizations and involving customers and partners. The goals of BAM are to provide real time information about the status and results of various operations, processes, and transactions so business decisions can be informed, quickly address problem areas, and re-position organizations to take full advantage of emerging opportunities. BAM systems are driven by business events, fed directly from integration software or from business process management software.

Business process performance

WebSphere Business Modeler

WebSphere Business Monitor

WebSphere Business Monitor (KPI)

WebSphere Business Modeler

WebSphere Business Monitor


Real Time Visibility into Business Performance
View performance and modify dashboards in real time
Scorecard view of Key Performance Indicators Track cost, time and resources Identify bottlenecks, balance workloads, reduce latencies

Ability to intervene in deployed processes


Set situational triggers and notifications Dynamically respond to these alerts

Supporting continuous process improvement


Monitor in-flight business processes Make process modifications based upon real-time data sent back to the Modeler for simulations

Simulation

Business Optimization

Agenda
BPM overview The life cycle of BPM Case study References

Case study
ClipsAndTacks Office Supplies Ltd. Modeling the current business process

Business problem
Call center hours of operation are not convenient. The telephone order submission process is too long. The order review process delays shipments. Regular customers, in particular, resent delays due to order reviews. The company is losing customers and revenue.

Business objectives
Reduce the average time from when orders are received to the time they are shipped to 3 days Achieve an order approval rate of 90% or better

Current order handling process


Customers can only order by telephone. Orders are accepted only from 8:00 a.m. to 5:00 p.m. Eastern Time, Monday to Friday. Customer service representatives handle all inbound order requests. All orders are forwarded to the order manager for review. Orders over $500 must be approved by the order manager

Revisions
Customers can order online (shortens the order process). Orders are accepted 24 hours a day, 7 days a week. Implementation of rules/policy engine is now included. The threshold for order review has been raised to $750. Orders over $750 must be approved by the order manager shortening average order time and increasing percentage of approved orders.

Solution architecture

Subsystem Description
Product Search UI Web-based user interface for customers to search and/or select products from an integrated product catalog. Order UI Web-based user interface for customers to enter order information, such as quantity and shipping method, or to view the details of existing orders. Order Approval UI User interface for the order manager to view and authorize orders. Configuration UI User interface for ClipsAndTacks' staff to configure the ordering process, specifically, the order approval process. Performance Dashboard Web-based user interface for Business Performance Analyst to query and view business performance results Order Handling Service A business process that responds to the Order UI and creates new orders or displays existing order status. The process determines whether an order can be automatically processed according to the procurement policies. Order Approval Service A workflow process that is used by the order approval staff to validate and approve orders.

References

http://www.ibm.com/developerworks/bpm Business Process Management: Modeling through Monitoring Using WebSphere V6.0.2 Products, August 2007 Designing SOA Solutions with the IBM SOA Foundation,SOA590 / RA911 ,December, 2006 Anthony Catts,Joseph St. Clair. Business Process Management Enabled by SOA. ibm.com/redbooks,2009 Anthony Catts, Joseph St. Clair. Business Process Management Enabled by SOA. ibm.com/redbooks,2009 Getting Started with SOA -WS007 SOA590 Designing SOA Solutions using IBM SOA Foundation Using IBM WebSphere Business Modeler, Monitor and Process for BPM Assessment Assets for Service Oriented Architecture-SW707 http://gocom.cc/ http://www.redbooks.ibm.com/cgibin/searchsite.cgi?query=BPM&SearchOrder=1&SearchFuzzy=

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