Processes—not applications—make the company go 'round
By Malcolm Wheatley, senior contributing editor -- Manufacturing Business Technology, 11/1/2005 7:00:00 AM
Companies routinely spend a lot of time—and money—creating ways of passing data between disparate applications. In most cases, what they are actually trying to do is merge disjointed business processes.
That was the case at Tetra, a Blacksburg, Va.-based manufacturer of aquarium products, where 40 people in six departments—working on at least three different information systems—must approve every engineering change.
This led to a situation in which each department processed paper forms related to engineering changes and passed them to the next department through interoffice mail. Needless to say, this was a lengthy process plagued by the frequent loss of forms, and almost no ability to track the progress of individual projects.
Tetra solved this problem by installing a business process management (BPM) platform—one of several newly emerging strategies companies are using to avoid the task of building custom interfaces between software applications that must interact to create new business processes. Other approaches include linking applications via enterprise portals, and expanding the use of applications that were originally purchased for a single purpose.
A BPM platform was the right choice for Tetra because it allowed developing a new engineering change process without heavy involvement from IT professionals. "We're a relatively small company, with a small IT shop," says Charlie Lisanti, Tetra's information systems consultant. "We needed a tool that could be easily integrated with our Oracleand [Microsoft] Windows environment."
The BPM platform Tetra chose is the e-Work solution from Metastorm. It configured a new engineering change process by linking information housed in Tetra's existing systems.
Metastorm says users access e-Work processes via a Web browser or e-mail system. Integration to other client- or server-based systems is by means of a comprehensive integration framework, while data for management reports is automatically collected by e-Work without the intervention of administrators or process designers.
Engineering change requests are now initiated by electronic forms sent to the desktops of those with review and approval authority. The forms appear on a "to-do list," Lisanti explains.
Built-in timers monitor whether workers complete a form, escalating requests to the next layer of management if the deadline passes. A "Watch List" shows where each outstanding change request is at any given moment.
Overall, says Lisanti, what used to take an average of five days to complete now takes about a day.
Such transformations aren't news to Peter Fingar, coauthor of Business Process Management: The Third Wave. "BPM is today's killer application," says Fingar. "Hard coding new processes takes too long—by the time you've done it, the situation may have changed."
Jeff Mills, VP of channel development for BPM vendor Bluespring Software, likens his company's platform to Microsoft's Visio business diagramming program. "It's a process design tool and presentational layer, allowing you to visualize and interact with processes across the enterprise, writing the required code 'on the fly'."
And that's not just withinthe enterprise, notes Fingar. "Companies don't work alone anymore: they collaborate with others. Process integration isn't about bridging the divide between enterprises—it's about obliterating it," he says.
Paper processes in play
But BPM software isn't the only means of integrating business processes. Boston-based AMR Research says portals can be used as a vehicle for ongoing business process improvement and refinement.
Atlanta-based Georgia-Pacific, a 55,000-employee paper & building products company, used a portal framework to process supplier invoices.
"We wanted to redeploy people from repetitive tasks that didn't add much value into areas of the business where they could actually contribute to the bottom line," says Ian Senior, a Georgia-Pacific procure-to-pay manager.
When it comes to tasks that don't add much value, it's hard to beat keying invoices into an SAPenterprise system—especially given 75,000 invoices a year. The goal: a Web-based portal that allows suppliers to trade electronically with Georgia-Pacific, invoicing on a self-service basis directly into SAP.
The portal provides two means of generating invoices, explains Daniel Ball, a director for Wax Digital, the U.K.-based systems integrator that helped Georgia-Pacific design and install the portal.
The portal can accept manual data entries over the Internet, but it also accepts invoices in bulk from suppliers' own enterprise systems. The system-to-system connection involves spreadsheets submitted into SAP as IDocs—SAP's standard data interchange format.
What's more, adds Senior, having automated validation routines built into the interface between the portal and SAP has cut the time spent resolving questions about data in invoices.
"Huge amounts of [time and effort] were spent resolving issues with pricing orders and purchase order [PO] numbers," says Senior. Taken together with the reduction in keying, he says, "We're saving hundreds of thousands of dollars."
The impact on suppliers is said to be minor. With some 20 percent of the supplier base generating 80 percent of the invoices, the bulk of the savings has come from simply targeting that 20 percent. Ultimately, though, says Senior, every supplier will be on the system.
Identify and respond
While end-to-end process integration is good, there are plenty of benefits from starting small, and building from there. And those benefits go beyond productivity gain.
"People generally start by looking for greater efficiency and lower labor costs—but then find the long-term impact is of greater strategic significance," notes Laura Mooney, director of marketing for Metastorm. "By becoming more process-centric, they gain competitive advantage, and become more agile."
By taking a process-centric perspective when looking at other IT projects, process integration can piggyback other initiatives, reducing cost and increasing ROI.
Fairfield, N.J.-based iSi North America saw improved revenues and customer service by being able to access and analyze sales data. This allowed iSi to identify and respond to business trends, and efficiently manage inventory. Yet the enabling technology in question wasn't specifically process-oriented at all, but a business intelligence product called QlikView, from QlikTech.
Finding its previous AS/400-based ERP system to be too complex for its needs, explains Rick Agresta, iSi president and CEO, the company decided to switch to a PC-based system: MAS200 from Best Software.
Bracing for the expense of transferring the company's transaction history, Agresta instead discovered that QlikTech's QlikView product—with its ability to work from the original transactions, rather than from an OLAP cube constructed from a predefined database extract—eliminated the need for a costly transfer. Historic data could stay on the AS/400 and be accessed, analyzed, and integrated with the MAS200 data from there.
"For us, it was something of an 'Aha!' moment," recalls Agresta. "We're not a very sophisticated company from an IT perspective, and this meant we could have a query tool that's as powerful as we need, without a better ERP system than we really require, or [involvement with] custom programming. We could implement more quickly, retain our transaction history, and save money—all at the same time."
Keep the perspective
But is this real integration? According to Anthony Deighton, VP of marketing at QlikTech, real users don't care—whatever integration purists might think. "In reality, what's important is using technology to get a view across data that you wouldn't otherwise get," he says. "The person who has to take a call from a customer doesn't care about integration—they just want to get the job done."
Call it, if you will, process integration's third lesson: the importance of maintaining—and retaining—a firm business perspective.
"What you get when you look at integration from an application perspective is an IT-centric view of what's going on, not a business view of what's going on," stresses Steve Craggs, vice chairman of the Integration Consortium, an integration-focused organization of end-user companies and software vendors headquartered in Alberta, Canada. The acid test is pragmatism: does it add value?
As more and more manufacturers turn their attention to integrating business processes, it's a thought worth bearing in mind. The ride in a Cadillac will be smooth and serene—but if the requirement is simply to get there, a Ford Escort will suffice just as well.
