Microsoft Server Product PortfolioCustomer Solution Case Study

DnB NOR Automates Processes with a Business Process Management Platform

OverviewCountry or Region: NorwayIndustry: Financial services—Banking

Customer ProfileBased in Oslo, Norway, DnB NOR is Norway’s largest financial services group, with 13,000 employees and earnings of NOK38 billion (U.S.$6.5 billion) in 2009. It includes subsidiary DnB NOR Bank.

Business SituationDnB NOR wanted to implement a business process management (BPM) platform to reduce costs, improve processes, and boost customer satisfaction. It also needed to automate some labor-intensive processes.

SolutionWith the help of Microsoft Services and Microsoft technologies, DnB NOR deployed a strategic BPM platform in only seven months and used it to automate the credit-evaluation process.

Benefits Accelerates implementation of a highly

available BPM solution Supports new strategy and improves

customer service levels Increases transparency and control Speeds time-to-market for innovative

services Generates market interest

“We plan to use our highly available BPM platform to dramatically change the design and implementation of business processes. It will help us to improve the level of service we can deliver.”

Lars Jørgensen, Lead Architect for the Digitalization Program, DnB NOR

DnB NOR invests in business process management (BPM) to accomplish business goals connected to cost reduction, process improvement, and customer satisfaction across the group. The digitalization program is a major contributor to the group’s BPM effort: its main objective is to automate processes for credit handling and daily banking. DnB NOR chose to first automate the credit-evaluation process because it included several manual steps that did not add value. To automate the process, and others in the future, DnB NOR needed a strategic technical BPM platform. The group engaged Microsoft Services to reduce risk and deploy a BPM platform using Microsoft BizTalk Server 2009 as the central component in a service-oriented, bus-based architecture. In just seven months, the team successfully implemented the first version of the BPM platform and launched the automated credit-evaluation process.

SituationFounded in 1822, the DnB NOR group has evolved into the largest financial services group in Norway. It includes DnB NOR Bank, which provides banking services to customers in Norway and nine other countries. It is also one of the world’s largest shipping banks. In addition, the DnB NOR group includes subsidiaries and brands like Vital, Nordlandsbanken, Cresco, Postbanken, DnB NORD, and Carlson, which deliver banking, insurance, asset management, and real-estate services in multiple countries. In 2009, the group’s 13,317 employees helped garner NOK38 billion (U.S.$6.5 billion) in revenue.

To support customers, the employees at DnB NOR Bank use several different systems and technologies in a heterogeneous infrastructure. It supports an integrated workflow system that has been in use for several years. The workflow system manages the credit process, which follows six steps: loan application, credit approval, customer acceptance, customer signing, loan setup and production, and loan payout.

Before 2010, to complete the credit process, caseworkers exchanged numerous paper documents with multiple individuals for approval and signature. However, because people exchanged documents using traditional mail through the post office, obtaining necessary approvals and signatures could take two to three weeks.

In addition, many of the bank’s caseworkers who manage the loan setup and payout processes are nearing retirement. Instead of investing significant time and money in training new employees to manage the

operational parts of producing accepted loan applications, the bank decided to automate its loan processes. By doing so, DnB NOR could increase efficiency and service levels. It could also boost control over its operations, gain greater insight into processes, and reduce costs.

DnB NOR needed a solution that would be extremely stable. Any downtime could delay processes and jeopardize service levels. Scalability and flexibility were also important. The bank wanted to use the solution to automate other enterprise processes and facilitate new offerings including a fully automated, web-based service for more complex processes like mortgage loans with existing collateral. DnB NOR also wanted to protect its existing investments. “The new solution had to interoperate with our mainframe, and we did not want to dramatically change the client application that caseworkers use to manage loans,” says Lars Jørgensen, Lead Architect for the Digitalization Program at DnB NOR.

SolutionDnB NOR decided to implement a business process management (BPM) platform using Microsoft technologies, including Microsoft BizTalk Server and the BizTalk Enterprise Service Bus (ESB) Toolkit. Nils Pedersen, Chief Architect at DnB NOR, explains, “We performed a thorough evaluation of alternative technology platforms and chose Microsoft. It was a decision that was supported by our good experience with BizTalk Server and the Microsoft platform in our insurance division, Vital.” To help implement the solution, DnB NOR engaged Microsoft Services. “We think that the product vendor is the best resource to help

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implement a product the way it should be used,” says Paul Arne Kristensen, Vice President of Vendor Management at DnB NOR.

In November 2009, Microsoft Services assembled a high-performance team of experienced engineers from the United States, Italy, and Norway. These people began to work closely with highly skilled personnel from DnB NOR to design the solution based on a service-oriented architecture (SOA). The team recorded the loan process steps and identified the role of every system component in each step. Engineers also decided which format or data schema to use to exchange information between system components.

Designing the architecture was an evolutionary process that matured over time. It required all parties to participate in challenging, in-depth discussions about the solution’s architecture and design patterns. “We needed the team from Microsoft to be agile and accommodate changes in specifications as the architecture matured, while at the same time maintaining direction and velocity to meet the set deadlines of the project,” says Jørgensen. “I am very satisfied with the way we handled this as true partners working together toward a common goal, especially considering that this was a fixed-price project with shared risk and considerable pressure on both sides.”

After reviewing the possible patterns for a BPM solution, the team ultimately chose the process-manager pattern. Bjørn Malde, Senior Consultant at DnB NOR, elaborates, “We had concerns about the initial design and wanted to evolve the architecture to

ensure that the BPM platform will be general enough to support various business processes, and agile enough to accommodate changing business requirements with minimal development efforts. The initial design simply used itineraries to string together automated steps. It lacked the generic mechanisms that allow for managing business processes using metadata. The implementation of the process-manager pattern solved this problem.”Commenting on the solution’s design and implementation, Fred Arne Sommerstad, IT Solution Design Architect at DnB NOR, says, “Microsoft Services maintained very good communication between team members and worked to accommodate our requests. It was rewarding to work closely with the team on a daily basis. I believe we managed to strike a good balance between the desire to timely launch the first automated business process and the need for a strategic platform that will help us efficiently automate various business processes in the future.”

On June 5, 2010, after extensive testing that involved personnel from business units and the IT department, DnB NOR released the BPM platform and the automated credit-evaluation process into production. The process incorporates both human workflow and straight-through automation. It supports approximately 200–300 loan applications submitted daily by customers through the Internet portal for DnB NOR Bank. In addition, the platform provides a development framework that the group can use to automate additional processes—and configure them to meet changing requirements. It also takes advantage of Business Activity Monitoring (BAM) in

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“Microsoft Services maintained very good communication between team members and worked to accommodate our requests.”

Fred Arne Sommerstad, IT Solution Design Architect, DnB NOR

Microsoft BizTalk Server 2009 to provide insight and control over IT components and processes.

BenefitsBy using Microsoft technologies and engaging Microsoft Services, DnB NOR rapidly implemented a BPM platform that the bank can use to improve customer service, reduce expenses, increase insight and control, and accelerate the deployment of innovative services. The success of the solution has shown that companies can implement BPM incrementally in a complex environment and realize benefits quickly.

Accelerates Implementation of a Highly Available BPM SolutionDnB NOR implemented its BPM solution in just seven months. “What makes this achievement so unique is that we introduced a new technical platform, the BPM framework on top of that platform, and the loan automation solution in only seven months,” Jørgensen says. “Achieving this was an important first step in an incremental approach toward implementing an enterprisewide solution for business process management.”

He continues, “Microsoft Services pushed ahead and was very agile in overcoming challenges. The consultants demonstrated a sincere interest in the success of this project every step of the way, and they even worked closely with our operations vendor, EDB, to make sure that we met our schedule.” In addition, Microsoft had the expertise needed to address some industry-specific concerns. For example, Torstein Steine Kristensen, Project Manager at DnB NOR, explains, “The way that

Microsoft Services conducted security analysis was very good.”

Despite the short time frame for implementation, the BPM solution is highly available. “Today, after almost five months in production, we have not discovered any critical issues,” says Torstein Steine Kristensen. “The solution has been running 24 hours a day, seven days a week since the day it launched. We are quite satisfied with this result given the fact that we introduced a brand new process automation platform in a fairly complex enterprise environment.”

Supports New Strategy and Improves Customer Service LevelsDnB NOR now has the IT capabilities needed to facilitate its new strategic direction, which includes the automation of additional processes. “We plan to use our highly available BPM platform to dramatically change the design and implementation of business processes,” Jørgensen explains. “It will help us to improve the level of service we can deliver to customers by changing how we work.”

The percentage of loan applications that can be fully automated from beginning to end is a business decision. In the short term, the bank expects to reduce the time required to process certain types of loan applications from days or weeks to minutes or hours. “By using Microsoft BizTalk Server 2009 to automate processes, we can improve the accuracy and quality of services, in particular with respect to collaboration between the bank and our customers when exchanging and signing documents,” says Jørgensen.

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“Microsoft Services pushed ahead and was very agile in overcoming challenges. The consultants demonstrated a sincere interest in the success of this project every step of the way.”

Lars Jørgensen, Lead Architect for the Digitalization Program, DnB NOR

For some other processes, DnB NOR wants to continue with some light manual intervention to maintain control and manage financial risk. However, DnB NOR plans to adjust its business rules over time to achieve the right balance between automated and manual processes to optimize business efficiency.

Increases Transparency and ControlThe new system gives employees the ability to have near-real-time insight into its loan processes through BAM. This can be used from a business and an IT perspective because both business-related data and performance statistics are gathered. “We can use this information to learn more about our processes, so we can understand how to boost efficiency,” says Pedersen. “For example, from a central portal, we can see all of the metrics collected by Business Activity Monitoring tools in BizTalk Server. We can then review those results and make adjustments to the rules to obtain new behavior or greater efficiency.”

Speeds Time-to-Market for Innovative ServicesThe bank can use its BPM platform to launch services that would have been impossible to develop with the previous infrastructure. For example, today customers can take an active role in the credit-evaluation process: if an application conforms to certain business rules, the customer can obtain automatic approval to move forward with a loan. If the customer chooses to move forward with the process and accepts the terms of the loan via the Internet, the system automatically produces all of the required documents and sends them, electronically, to the customer for signature. “The offerings we can deliver

today with the Microsoft platform, such as web-based mortgage loans, are quite new to the marketplace,” says Jørgensen. “We can use our SOA to take the lead in implementing self-service, Internet-banking services in our region.”

Today, DnB NOR can launch new process automation offerings in significantly less time because it has the technologies in place to speed development. “We have solid building blocks that we plan to reuse to automate other enterprise processes and services,” says Malde. Disparate technologies—or even systems at third-party sites—are not an obstacle. Sommerstad says, “It doesn’t matter which systems need to send or receive information; we can use BizTalk Server to automate workflows.”

Generates Market InterestThe success that DnB NOR has realized in implementing the BPM platform and automating the credit-evaluation process is duly noted in the marketplace. “Many organizations in Norway and abroad are now approaching us to learn more about the architecture and the delivery model at DnB NOR,” says Inger Lise Sanness, Sales Director at Microsoft Services. “This project has a high profile internally at Microsoft as well, with high-level executive support. The implementation team has already presented at several internal conferences and meetings to share experiences from DnB NOR.”

Jeppe Sverdrup, Services Executive at Microsoft Services, says many companies have BPM as a top strategic priority, and IT is recognized as the enabler of process automation. However, despite solid

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"The offerings we can deliver today with the Microsoft platform, such as web-based mortgage loans, are quite new to the marketplace. We can use our SOA to take the lead in implementing self-service, Internet-banking services in our region.”

Lars Jørgensen, Lead Architect for the Digitalization Program, DnB NOR

business cases, few organizations take on the challenge of actually creating a BPM solution to address real needs. He notes, “By engaging business and IT personnel in a rich and meaningful dialogue, companies can build enough momentum to overcome the initial architectural discussions, complexities, and risk elements. This project at DnB NOR proves that it is indeed possible to realize the benefits of BPM in a short time, even if the company has a complex and heterogeneous enterprise environment.” Inger Lise Sanness elaborates, “Solid business anchoring, the right partnership atmosphere between customer and vendor, and a high-performance team of experienced engineers working with high precision make all the difference.”

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Technical SummaryDnB NOR took advantage of built-in capabilities in BizTalk Server 2009 and the BizTalk ESB Toolkit 2.0 to create a BPM solution that delivers advanced messaging, process management, and transformation services that connect heterogeneous applications and databases. To provide an effective mediation layer for loosely coupled SOA components, the design team used the canonical data model and several architectural and design patterns such as process manager, publish-subscribe, routing slip, and observer. As a result, the BPM solution is highly configurable and it can support processes that also include human workflow.

Developing the InfrastructureThe team managed the implementation of the new BPM solution by adhering to application lifecycle management (ALM) processes, and by using collaborative tools such as Microsoft Visual Studio Team Foundation Server 2010. The team set up test-lab environments for development on

virtual servers. Supported by Hyper-V technology in the Windows Server 2008 R2 Enterprise operating system, these virtual systems run on a physical architecture hosted by IT services provider EDB. The architecture includes one IBM System x3650 M2 server computer and three IBM System x3850 M2 server computers.

The team chose to use a virtual configuration for several reasons. With virtual environments, engineers can perform more in-depth tests—and, by doing so, greatly simplify solution deployment. For example, with virtual servers, engineers could create a complete test framework that simulates external clients and services. In addition, by using Hyper-V to virtualize servers, the team could take advantage of automated build and deployment capabilities in other Microsoft products. This included the ability for engineers to provision test-lab environments on demand with Microsoft Test Manager 2010 and Microsoft Visual Studio Lab Management 2010.

Establishing Communication and Creating Processes The team designed the SOA so that it uses BizTalk Server 2009 as the controller of automated processes and communication between internal and external components. In turn, BizTalk Server uses the BizTalk ESB Toolkit to route messages between components—using the bank’s existing IBM WebSphere MQ servers. To shape and compose dynamic business and platform services, engineers used the Microsoft Visual Studio 2008 Professional Edition development system, the Microsoft .NET Framework 3.5, Microsoft

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This diagram illustrates how Hyper-V in Windows Server 2008 R2 supports Microsoft Visual Studio Team Foundation Server 2010 and Test Manager 2010 by running virtual labs with a complete environment for each developer.

ASP.NET, and Microsoft Universal Description, Discovery, and Integration (UDDI) Services. In addition, engineers took advantage of Windows Communication Foundation to expose and consume web services. They also provided authentication and authorization management with the Active Directory service and Windows Authorization Manager.

To automate the credit-evaluation process, the team used built-in features in BizTalk Server and the BizTalk ESB Toolkit, including Itinerary Services, Itinerary Routing Service, Transformation Web Service, and the Resolver Web Service. For example, in the BizTalk Business Rules Framework, engineers recorded pertinent business rules to enforce policies in business logic. They also created common vocabularies to understand those business rules. Engineers used this information to set up orchestrations—or automated process flows—that facilitate the various business services involved in evaluating credit, such as managing electronic signatures on loan documents. Connecting services so that they could automatically exchange information was simplified with the Resolver Web Service: it stores the details needed to communicate with each service in the SOA. In addition, the team took advantage of the Transformation Web Service to prepare messages and documents, including loan applications, to be sent to components outside the SOA. Engineers then used Itinerary Services to connect the business services with human workflow steps and create the end-to-end credit-evaluation process.

To automate the process, engineers configured BizTalk Server to monitor

process flows for specific events. BizTalk Server uses these events to initiate steps in the itinerary. In addition, engineers used the Exception Management Framework in the BizTalk ESB Toolkit to record all process exceptions and which event—such as a one-minute delay in a system response—must occur to trigger a specific exception. Storing, Managing, and Analyzing DataThe team deployed Microsoft SQL Server 2008 R2 Enterprise data management software to provide the core message-persistence facility for BizTalk Server, and to store the configuration data for the solution. This includes data about business rules that the team stores in the Business Rules Framework.

To simplify the management of the architecture for DnB NOR, employees at EDB deployed a suite of Microsoft administrative tools. These included Microsoft System Center Data Protection Manager 2010 to automate system backups—and Microsoft System Center Operations Manager 2007 R2 and System Center Virtual Machine Manager 2008 R2 to manage the bank’s server environments.

To simplify system administration, IT personnel can use the ESB Management Portal in the BizTalk ESB Toolkit to monitor and control SOA components. In addition, the team configured BAM in BizTalk Server to access and expose data about key performance indicators in the BAM Portal. Authorized employees can use this information to gain real-time insight into processes at a level of detail that was not possible in the past.

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Microsoft Server Product PortfolioFor more information about the Microsoft server product portfolio, go to:www.microsoft.com/servers

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For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about DnB NOR products and services, call +47 915 03000 or visit the website at: www.dnbnor.com

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published January 2011

Software and Services Microsoft Server Product Portfolio− Windows Server 2008 R2 Enterprise− Microsoft BizTalk Server 2009− Microsoft SQL Server 2008 R2

Enterprise− Microsoft System Center Data

Protection Manager 2010− Microsoft System Center Operations

Manager 2007 R2− Microsoft System Center Virtual

Machine Manager 2008 R2 Microsoft Visual Studio− Microsoft Visual Studio 2008

Professional Edition− Microsoft Visual Studio Lab

Management 2010− Microsoft Visual Studio Team

Foundation Server 2010−

Services− Microsoft Services

Solutions− Microsoft BizTalk Enterprise Service

Bus Toolkit 2.0 Technologies− Active Directory− Hyper-V− Microsoft ASP.NET− Microsoft .NET Framework 3.5− Microsoft Test Manager 2010− Microsoft UDDI Services− Windows Communication Foundation

Hardware IBM System x3650 M2 server computer IBM System x3850 M2 server computers