BPM for agile development & minimizing SAP customization

Agile Development & Minimize SAP customization using BPM

Logan Vadivelu WW Smarter Process Technical Leader Distinguished Chief IT Architect (The Open Group)

Oct 2014

© 2012 IBM Corporation 2

Agenda

• What makes a Business Application ?

• Challenges with ERP

• Example HR Processes enabled by BPM

• IBM BPM enables Rapid development of Business Applications – Developing business logic (process, rules, activity / business function) – Developing User Interface (UI) – Developing Analytic Reports / Dashboard

• Customer Successes

• How can IBM Help you


Agenda








Three key elements of a Business Application

• A business application typically has 3 key elements 1. Business logic (process, rules/

decisions and business functions)

2. User Interaction & Collaboration 3. Business Data & Reporting

• Packaged software applications – combines the above 3 rather

‘rigidly’ resulting in complexity and inflexibility

• BPM software platform enables – ‘separation’ and ‘loose coupling’

of the above 3 solution elements – for improved flexibility, agility and

rapid development / modification

Executive / Manager

Customer Sales & Service

Accounting / Purchasing

Contract / Legal

Business Logic (Process & Decision)

Users Interaction & Collaboration

Data & Reporting (Structured & Unstructured)

PROCESS RULES


Technical Strategy for Business Applications Development

• Common wisdom has been to purchase “Packaged application software” for implementing business applications – They typically have limitations in supporting key business requirements and

lack agility and flexibility

• BPM technology use for business applications enables ‘rapid development’ and deliver much higher value than packaged apps

Ref: Seven reasons to build business applications on BPM technology, Neil Ward-Dutton September 2011

• supports iterative, collaborative change

• speeds up user acceptance

• better manages customizations

• supports continuous improvement to support business and users needs

• supports transition to a software-as-a-service (SaaS) delivery model


Agenda








Executive Management Customer

Service

Invoice Reconciliation

Team

Finance and Ops Account

Administration

Process Flow

Rules / Events

Analytics Social / Collab

Docs

Mobile

Business Operates Differently in ERP Vs BPM Environments

Executive Management

Customer Service

Risk Management Teams

Finance and Ops

Account Administration

1

2

3

4

5

6

Manual Coordination Dependency on Knowledge Users Hard to manage, change, improve

Consistent business response by experts & novice Collaboration, Visibility, flexibility Continuous Improvement, less impact to business

Process-driven Transactions Management Human-driven Transaction Flow Management


Business Performance Optimization Gaps in SAP Environment

Flexibility

Visibility

Agility

Control

Operational Managers & Users struggles to find status or bottlenecks for responding to Customers, Suppliers, and regulators

Configuration approach limits flexibility. Business works “In and Out” of SAP to support business operations inside the enterprise and along the value-chain

High customization leads to “slow IT response to business changes” Depends on ‘flow charts’ & users training for implementing process changes

Limited process & business control compliance. Lack of operational cost control capability. Hard to manage workload or onboard new workers


Where ERPs / Packaged Apps fit within Business Process Hierarchy Understanding BPH is critical to effectively manage business processes

Process Hierarchy is a way of modeling large and complex processes through decomposition into lower level processes and detailed steps to show information at different granular levels.

Incr

easi

ng P

roce

ss

Gra

nula

rity

(American Productivity and Quality Center)

Process Levels - APQC Process Classification Framework (PCF)

L1

L2 - Group

L3 - Process

L4 - Activity

L5 – SAP Transactions

Category Vision / Strategy

Operation

Process

BPR / Blueprinting

Modules Configuration


An Example of Process Levels in BPH – Order to Cash BPM enables Level – 3 process modeling, orchestration of Level-4s and provide visibility

Capture Order Deliver Order Receive Payment

BPH Level 1 BPR, Blueprinting (ARIS, Visio, IBM BWL)

Web Order B2B Order Other Channel Level 2

BPR, Blueprinting, Process Modeling (ARIS, Visio, IBM BWL KPIs, SLAs, Rules, etc)

Level 4 BPM & ERP (Human & System Task, Rules, Integration, ERP Configuration, Customization, etc)

Check & Apply Promotion, xSell / upSell

Select Delivery Option, upSell Express delivery

Select Stock Availability & Determine Warehouse

Select Payment Option, Do Credit Check

Create Order in SAP

Approve ?

Y

N Display Message

Level 3 BPR, Blueprinting, Process Modeling, BPM) (BPMN Modeling in IBM Process Designer BPEL in IBM Integration Designer Human & System Task, Rules, KPIs, SLAs, etc)

Validate Info

Level 5 Order gets Blocked, Priority Changed, Shortage of Stock, Delivery Date Changed, etc Business

Exceptions / Events

Play in Slideshow Mode


Business logic is represented as ‘process, activity, rules and functions’ Process modeling enables easier understanding, business visibility and manageability

Level 4 Process Step

Verify Customer & Product Info

Credit Limit Exceeded ?

Yes

No Create Delivery

Manager Approval

Credit Approved ?

Yes

No

Pick & Pack Goods

Post Goods Issue

Enter Order Data

Auto Release Block ?

Yes Release Credit Block

Review Credit

Increase

No Hold Order

Invoice Customer

Post Payment

Business Process - - Order-to-Cash

Accounting Process - - Accounts Receivable (Credit Memo)

Authorize Returns

Submit Returns Request

Exchange or

Return

Return

Exchange

Create Returns with Free of Charge Subsequent

Delivery

Create Returns Delivery

Post Goods Receipt for the Return

Create Credit Memo

Require Approval ?

Yes

Issue Credit Memo

Obtain Approval

No

Post Goods Issue for the

Delivery

Obtain Customer

Confirmation

Level 4 Process Step

Activity

Rule / Decision

Activity is implemented as business function


BPM Process Hierarchy for SAP BPM Adds Value Above and Below the SAP Core Transactions

L1

L2 - Group

L3 - Process

L4 - Activity

L5 – SAP Transactions

Process Levels - APQC Process Classification Framework (Source: APQC – American Productivity and Quality Center)

BPM

SAP

L6 – Sub-Transaction and Exception Management

BPM + SAP

Category

Record Keeping (SoR)

Data Integrity

Transaction Reporting

Data Reusability Productivity

(System of Record)

Flexibility

Visibility

Simplicity

Optimization Automation

Mobile / Social

Agility

Consistency

Reusability Compliance SLA / KPI

Collaboration

(System of Engagement – ‘process’, ‘mobile’ ‘social’)

Play in Slideshow Mode


IBM BPM enables Iterative, Agile application development

Use ‘live’ process execution to design and validate business application with users and deploy into production server

Model Processes

Playback Process

Design UI Screens

Monitor Results

Simulate and Refine

Deploy!

Design, build and refine processes for execution in a single integrated tool set. Optionally store process definitions in SAP Solution Manager Repository.

Iteratively invoke or design screens as part of the process definition exercise

Playback modeled processes at any time to directly see, feel and touch the real process

Empirically understand how the process can meet KPIs and SLAs

Simulate changes without changing the current model. Incorporate new process changes

Promote the new or changed process into production


IBM Business Process Manager V8.5.5

Process Design / Optimizer

Integration Design

Process Center

Portal

Mobile App

Process Server Core BPM Advanced Automation & Ad Hoc

BPMN Case Adaptors Process Rules Performance Data Warehouse

BPEL

Social Collaboration

Coaches Dashboards

Network Multiple Process Centers

Server Registry Shared Assets

Versioned Assets

WAS ND 8.5

Mobile Toolkit

Case Design

Embedded CMIS Repository


Agenda








An illustrative Hiring Process – Capability to Process Model

Create Position

Describe duties

Research salaries

Salary approval

Post internal

Post external

Engage firm

Evaluate

Screen candidates

Setup face-to-face

Conduct interview

Make Offer

Extend offer

Negotiate terms

Source: IBM Blueworks Live


An Example of Expense Reimbursement Process


HR On-boarding in a Heterogeneous IT Environment

• On-boarding touches on core HR of course but also

– Finance (payment of recruitment commission to externals) ,

– Legal (contract validation) ,

– Recruitment (if there is an internal department),

– Procurement ( dealing with external recruiters etc) and

– Internal systems like staff directories,

– Internal education schedules (eg e-learning systems, like Saba)


Illustrative Hiring On-boarding – Capability model

Select Candidate

Inform Recruiter

Establish Compensation

Package

Establish Start Date

Background Check

Criminal Record Check

Drug Screen

Review Results

Offer

Create Offer Letter

Transmit Offer Letter

Accept Offer

Add Candidate To HR Records

Input Employee Information into

Database

Request Equipment

Request Workspace

Request Access Badge

Set Employee Status To Active

Orientation

New Hire Orientation Class

Benefits Overview Class

Provide Orientation CD

Watch Orientation CD

Complete Forms

Begin Work

Meet Manager

Obtain Access Badge

Obtain Equipment

Go To Workspace


Illustrative Hiring On-boarding – Capability to Process model


HR Hiring Process


Agenda








1) Developing business logic (process, rules)

• Single Interface that enable business process authors and analysts to – Model and implement

– Simulate

– Inspect and debug

– Examine process performance

– Automatically optimize


Authoring business rules to implement Decisions


2) Developing User Interface (for Collaboration and Interaction)

Tasks grouped by: Overdue; At Risk; Due Today; Due Tomorrow; Due This Week; Due Later

BPDs I am authorized to start

Completed tasks

Full-text, internet style search search

Business Space

Click to Claim

Priority Indicator

Start Process Instance


Speed time to create new coaches with new stock controls, updated default human services, and coach data validation services

Default human service and Coach for User Task activities

5 new “stock” coach views

BPM enables Rapid Application Development (UI)

Design-time modeling of coach data validation through a service

Runtime display of input errors


3) Developing Analytics Reports and Dashboard for Visibility

• Accessible to users (Managers) that belong to tw_managers group and are managers of the teams

• Shows quick overview of a team status (At Risk / Overdue / On Track) • Has a link to explore deeper the team performance • Replaces pre v8.5 My Team Performance dashboards

Link to detailed team peformce page


Visibility in Run-time and Design-time (simulation)


IBM Mobile App for iOS - Workflow Tasks & Process Launch

Add Attachments

Stream


IBM Mobile App - Complete Approval Requests Anywhere & Anytime

Task List and Task Completion


Customer Successes with IBM BPM

Auto Component Manufacturer Automates Integration Process Between Engineering and Manufacturing (SAP)

Aircraft Company • Reduces supplier collaboration issues caused by lack of visibility into engineering changes. • Cost savings for the company of over $9.5 Million over three years

Toy Company • Manages Supply chain processes. • Reduced cycle times by 80 percent, from 12 days to only two • Increased productivity by 250 percent

Pharma Company Manages core manufacturing and supplier collaboration processes

Airline manages MRO processes • End-to-end business flow, from ordering maintenance work through completion, including procurement, MM • Faster and more accurate reporting and analysis • Improves decision making and enhances staff productivity

Electronics Company Manages order fulfillment, pricing, global logistics, and customer resource management business processes

Automation Technology Company • BPM as strategic sales and marketing platform to manage processes across SAP and BAAN systems • Speeds up the process times significant across time zones in 15 countries (more to be added in future releases)

Electrical Utility Company • BPM for alarm analyses to spot and speed asset service and maintenance •15% more Work Orders, 15% crew productivity increase, 7% staff productivity gain


Customer Successes with IBM BPM for HR Processes University Hospitals accelerates recruitment Many of our core HR processes were still very manual and paperwork-driven, or relied on various spreadsheets and small databases that weren’t integrated with each Other. The process was taking an average of 18 weeks, and in some cases up to 26 weeks.

Major grocer upgrades HR processes With over 32,000 employees, Recruiting, hiring, and empowering great people is top priority for this company. Keeping up with HR events and ensuring process completion is a huge task—particularly since this organization is the fastest growing grocer in North America. The first HR processes were deployed to 500 users in 90 days. The initial deployment yielded significant benefits—with reductions of up to 90 percent of the time spent managing the process while accelerating the completion of requests by over 400 percent. Today, there are 14 different processes deployed—supporting a complete range of areas from pay changes to 401K and other employee benefits.

An Airline in the Middle East • Implement an integrated human-capital management system for managing and orchestrating all mission-critical HR business processes. • Automated orchestration of 28 dynamic HR approval processes, such as leave requests, excess-overtime approvals and salary increases

Paint Manufacturer in Asia • Implemented BPM for the management of its sales staff, human resources (HR) processes.

A Govt Agency • Design to streamline and standardize the process for receiving, sorting and choosing new hire applications.

A Super Market in Europe Improved HR management by removing the complexity in vacation requests. Employees submit through a portal to HR. The system automatically updates employees' calendars to reflect vacation dates and adjusts the payroll. Managers have visibility to better organize resources.


Agenda








The SAP Process Opportunity Workshop

A collaborative workshop between the IBM and you to: • Determine which areas of business pain and/or opportunity are good fits for BPM for SAP • Select candidate process sets with high affinity to IBM BPM for SAP • Identify and prioritize potential pilot projects • Select and scope a pilot project (90-120 days)

• What does the IBM team do? • Clarify the pilot project scope • Characterize the expected business impact and benefits • Assess the high-level implementation effort and solution development • Identify and rank additional projects beyond the pilot project

How does it work? • Delivered onsite through collaborative discovery sessions with process owners and key

business and technology stakeholders • Pre-workshop preparation calls provide orientation on the workshop approach and

potential process improvement opportunities as well as set the workshop agenda • Preparatory time is also spent gathering and reviewing existing customer process

documentation

Typically 2-3 days, conducted free of charge


Questions

+ = Enables Innovative Business Model

Software

BPM for agile development & minimizing SAP customization