BPM in the trenches

In 2002, the city embarked on a $75 million project to replace legacy mainframe and paper-based systems for procurement, HR, budgeting and planning, performance management, payroll, and a host of other critical city functions, according to Sanford Lazar, director of ERP at the Office of the CTO of the District of Columbia.

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As part of a best-of-breed approach incorporating packages from vendors such as Ariba, Hyperion, and PeopleSoft, the city acquired an integration and BPM solution from enterprise middleware vendor SeeBeyond "as the glue" to link all the pieces together, Lazar explains. The SeeBeyond package provided code conversion and format translation from each application back to the legacy general ledger and other relevant systems.

Putting in BPM as part of a total applications refresh enabled the city to begin rethinking many of its core business processes. "It gave us the ability to look at how we did it before and take out things that don't add value," Lazar says. As its first BPM project, the city totally revamped its antiquated paper-based procurement system, first monitoring and modeling workflows and then cutting out layers of unnecessary approvals in a system that serves 72 city agencies and handles more than $1 billion in transactions.

"We've gone in some cases from a 20- or 30-step process down to a four- or five-step process," says Lazar. "It used to take three weeks to months to get a transaction approved, and now we average seven days, with many being approved in one or two days." Most importantly, he notes, the city gets a total time-stamped audit trail of every single transaction and every point where a person touches a transaction. If something is amiss, an exception is generated for reconciliation.

Getting the system up and running efficiently required some tinkering, Lazar explains. Specifically, finalizing the integration architecture required a rewrite of the initial Java prototype code, which used intermediary staging tables to obtain and update data from the general ledger system. Although this method worked and provided better transaction records, it turned out not to be less efficient and scalable as using direct, real-time calls right into the general ledger's database, Lazar says. "We built a lot of code in the prototype to see it working end to end and did a lot of testing," he recalls. "When we went live, it worked like a charm."

Lazar says the system's end-to-end process visibility has given better insight into causes of delays and bottlenecks. "Why can this group do it faster than this other group? Typically it's a training issue, or in some cases groups will put more approvals in as a throwback to the old way of doing business," he explains. "Well, they may have always approved it before, but now they don't need to because it's in the system."

Although change is always difficult, Lazar has been pleasantly surprised by the city employees' reactions to BPM. "We've seen really amazing change in relatively short time. It's about overcoming the skepticism," he says. "Once they see backing from executive management and that investment to do it right [has been] made, [employees] go along with the flow and bring up new ideas. Employees will gravitate toward anything that helps them do their job better."

American National Insurance Co.: Starting early

Way back in 1998, when e-commerce was all the rage and nobody was talking about process, American National Insurance Co. (ANICO) decided to become an early adopter of BPM. "We weren't visionaries. We just had a problem to solve," says Gary Kirkham, vice president and planning director at ANICO.