Thomas Dwyer said that most of the problems companies have are due to process problems. These include:
- Inefficient productivity
- Manual resource allocation
- Manual change management
- Weak resource management
- Poor visibility and control
- No risk management
- Weak business agility
- Disconnected processes
- Slow development
- Missed deadlines
- Bottlenecks
- No audit trail
The strategic imperatives for business are speed, flexibility, and innovation. Everyone needs to mitigate the shortage of IT resources and eliminate inefficiencies while reusing business components to respond to changing market conditions. This means defining new ways of working and building relationships across the value chain for generating revenue and profits.
The challenges are to streamline the business processes to improve customer service, satisfaction and loyalty by creating a single global view of the customer. This increases competitive advantage while providing faster access to critical information. It also increases the value of prior capital expenditures and improves the entire value chain.
Dwyer says that CEOs are changing the way they see IT, from viewing it as a cost center to an innovation center that can deliver revenue growth. The CIO is now seen as a change agent for the company. Process innovation requires a structured approach to keep the company constantly involved in a process of innovation that involves exploration, experimentation and education. Dwyer related that many CIOs are bringing in people with more business expertise to make this happen.
Enterprises that are process driven are organized, managed and measured in terms of the core business processes. These include:
- A means to conceive new processes and put them into action
- A systematic method of analyzing the impact of new processes
- A reliable way of introducing new processes
- A managed portfolio of processes with the ability to customize and combine them
- Executable process models aligned with the company strategy
In a process-driven company, process improvement is embedded in the business strategy. Competitive advantage is supported throughout the organization including budgeting and resource allocation. The key processes flow seamlessly through the value chain and the architectures enable IT to support new business models.
In order to achieve this, there needs to be a move toward more loosely coupled systems, going from point-to-point, and hub and spoke toward dynamic, service-oriented architectures. BPM and SOA are very synergistic, according to Dwyer.
The innovation process starts with deploying BPM and workflow for tactical projects. Then, efficiencies are created by developing an inventory of processes and defining desired business outcomes. Next, a set of process-aware software components are developed that can be leveraged across the enterprise resulting in the ability to respond to new opportunities and markets. This process creates a valuable set of intellectual property for the business.
The promise here is for people on the business side to create business models that are directly executable, without going through the historical problems that have been typical of the IT/business relationship. SOA and Web services allow the creation of very smart objects that can be used through the entire value chain.
Dwyer said that 2005 is a watershed year for SOA. More and more people, including a significant number of CEOs and vice presidents are turning to SOA. A Yankee Group survey found 76% of decision-makers are making significant investment in SOA. A lot of innovation is being done in retail, banking and brokerage as a result.
In summary, Dwyer said:
• Process-orientation is the next logical evolution in business models
• Process-driven companies will prosper through all stages of growth and maturity by fully leveraging innovative services throughout the value chain
• CIOs and IT will play an expanding role in leveraging technology to achieve business process innovation
• Moving to a process orientation enables the business to view its key value-creating processes as enterprise assets
He gave an example of what process improvement can mean to the bottom line. A maker of digital switches needed 44 weeks from the time the requirements for a switch were finalized until the switch could be delivered to the customer. A competitor could do the same thing in 12 weeks. The first company lost 32 weeks of profit for every single customer.
