• November 1, 2007
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Modern Times, Modern Methods

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Workflow automation conjures images of assembly lines, factories, and robots, but we deal with the concept all the time even if our jobs don't involve manufacturing. Just as organizational charts show how responsibility flows throughout an organization, workflow automation (WFA) governs how information and work move from start to finish. An element of a newer and broader concept known as business process management (BPM), WFA's a subtle but powerful concept that can have far-reaching effects on the success and survival of your business. There's been a long-running argument regarding where WFA and BPM overlap, according to Jon Pyke, CEO of The Process Factory, a consultancy that specializes in the topic. "Where they are different [is in] which mathematical models to use, which standards are applicable to which part of the technology stack, and all that associated puff," Pyke wrote in Beyond BPM: Knowledge Intensive BPM, a November 2006 white paper. "The problem stems from the fact that most workflow products were flawed and as a result, the problem in the gene pool has rippled through to the new BPM species." The simplest statement of workflow automation's value comes from Jim Manias, vice president of marketing and sales for software engineering firm Advanced Systems Concepts: "Imagine if the financial industry processed payments before deposits." The world would be awash in overdraft fees because of that tiny transposition, taking funds from accounts that didn't yet have them because the relevant checks were not yet processed. Workflow automation is supposed to simplify and streamline business. "Historically, everything was date- and time-based for workflow," Manias says. "There were built-in wait times at every step to allow people to account for problems that might crop up, whether they did or not. Now we can use events to trigger workflows, including triggering them on the completion of the previous step." Technology lets us remove unnecessary waits and mismanaged handoffs. There's more to WFA than just technology, of course, and thinking of it as such would miss the point, says David Straus, senior vice president of worldwide marketing for Corticon, which considers itself a vendor of business rules management, yet another subsector of BPM. "BPM is a behavior, a discipline. It's thinking about, in a structured way, how information moves through your company," Straus says. "There are tools for enablement, but it's consciously thinking about how work moves, and how you can guide it." The key elements of workflow automation are the decisions made regarding activities and tasks. "There are two ways to handle decision-making," Straus says. "Either you give control to a person who reviews the company policies and clicks the approve/deny button, or you give it to a computer that has the policies programmed into it." People cause problems, whether through misremembered training, simple errors in looking at data, or even through malicious intent. Computers drive down costs and are more reliable if programmed correctly, Straus says, "but they don't deal well with sophisticated processes, or with change." The best answer here is a combination: Automate decisions when doing so improves throughput, and make sure humans are handling anything that requires interpretation. This hasn't always been properly addressed, in Pyke's experience. "I'm oversimplifying things, I know, but it does seem that BPM is becoming a technology solution as opposed to the business process solution it was meant to be," he writes. "Somewhere along the way, one of the key elements in a business process -- a person -- dropped off the agenda." He quotes Forrester Research's finding that 85 percent of business processes involve people -- "carbon-based resources" is Pyke's phrase -- but that figure has been overlooked. "Many vendors will tell you that their BPM products support human interaction, but what they are talking about will be simple work item handling and form filling," Pyke writes -- features that are a long way from collaboration and interaction management. But technology remains critical, since it enables new ways of operating. "IT is beginning to realize the effect it can have on business; an example is testing a new process," Straus says. "Previously, it was hard or impossible to carve off a subset of customers and test new offers and workflows in a real environment through agent training. Business process technology makes it much easier to create and run what-if scenarios, or subdivide a group and design a test offer for them." Where Workflow Automation Works One place where WFA can make a difference is in contract management. "It's easier to automate fully with low-risk/high-volume contracts, since they require fewer touches and aren't likely to get out of hand," says Anthony Roth, senior director of product management for contract management vendor I-many. A contract that requires little personalization or alteration obviously doesn't differ from a standard and accepted document that a computer will handle efficiently. It would be a mistake, Roth says, to subject the result of hard-fought negotiations to a fully automated process. "Just because you can automate something doesn't necessarily mean you should," he notes. Straus has a similar case. "One of our customers, Precedent Insurance, is moving its application-and-approval process to the Web, putting the process into the hands of customers with a series of decision-making questions dependent on the previous questions," he says. "But it's the actual insurance underwriters creating the approval process, building in their understanding of health insurance. They weren't retrained as Web coders, unless you count 'writing formulas for a spreadsheet' coding." But automation can scare some people. "In contract management systems, workflows and lifecycles are built into the application. Salespeople can see this as a benefit or a hindrance," Roth says. Nobody likes to feel that they can be replaced -- certainly not by a machine -- but there are some very good reasons to automate processes. "Companies put it in to control risks, through standardized language and structures," Roth says, adding that they must work with the sales team, not around them, to create the contracts and processes. "That way," he adds, "sales knows when they initiate a contract that it will go faster, reducing sales cycles" -- and the skill of the salesperson augments the power of the computer. Where Workflow Can Benefit Your Workplace
Incentive management is another area where workflow automation has been important to industry growth. (See "Pay Day," October 2007.) "Automated workflows are the foundation for effective sales compensation management, bringing visibility, consistency, predictability, and compensation accuracy and timeliness," says Karen Steele, vice president of marketing at Xactly Corporation, a sales performance management vendor. "With automation, a company can implement more strategic and complex compensation plans; modify them quickly to meet new opportunities; and more easily analyze their effectiveness for continuous process improvement." Compensation plans start with the creation of business rules that will correctly calculate credits, commissions, and bonuses. "In an automated workflow, these rules take effect automatically, removing any doubt of inaccuracy and fostering trust between sales and finance," Steele says. "This is in sharp contrast to spreadsheet-based compensation management, where spreadsheets have been proven in recent studies to result in as much as a 10 percent error rate." Paychecks being as important as they are, automation clearly doesn't suffer as much pushback here. Automated workflow is an absolute must when mobility is involved, since the remote user doesn't have access to the same resources an office-based worker has. Mobility applications improve business processes by automating what would otherwise be tedious or difficult on the road. ICI Paints, a NetSuite customer using Antenna Software's AMPower mobile sales solution, illustrates the benefits: In going mobile, ICI eliminated manual and paper-based processes; simplified the quotation process by giving sales reps the ability to provide real-time quotes and estimates; and enabled sales reps to place orders in real time while with their customers. The greater sales visibility and the productivity rise of 30 percent didn't hurt, either. Unfortunately, Straus says, there really is no top-to-bottom system to manage what is perhaps a company's most precious commodity: the decisions it makes. And any such system would really need to be built from the bottom up, anyway: The most important and timely decisions are made at the functional levels of the business, and higher-level actions are based on their results. Straus has a personal anecdote of his own: Several years ago, his bank instituted programs intended to increase its wallet share with customers. Straus says now that he was doing a lot of traveling at the time, and could have benefited from automated bill-payment services. "Somewhere along the line, I missed making a deposit to my account, which led to my being overdrawn for about $300 in overages," he says. But when he went in to straighten out the issue, an overzealous bank rep "followed the corporate directive and tried to sell me overdraft insurance." Straus explained his situation, but when the rep noticed in Straus's customer file that he only had a checking account with the bank, the rep tried to upsell an interest-bearing account. "I pointed out that I was a long-term loyal customer, who had never been overdrawn before, and his response was to try to sell me a credit card with overdraft insurance. The upshot of this is that I'm no longer a customer, and the reason is a lack of workflow and decision-making ability." It's the Processes, Stupid Pyke suggests that the next step in workflow automation and BPM is "process-based technology that understands the needs of people and supports the inherent 'spontaneity' of the human mind." He calls this Knowledge Intensive Business Process Management, or KIBPM. It's putting the focus on the process (as Straus would), rather than on the work itself: "Of course the underlying objective of the process is still of vital importance. Indeed, it provides the underlying bedrock of getting tasks completed -- but these processes are much more complex, ad hoc, enduring, and important to the business. They are contracted processes as opposed to coordinated or controlled processes as provided by Workflow and BPM solutions." Using the BPM approach would be like hitting a hole-in-one every time you tee off, Pyke says: nice, but hardly realistic. "There's a lot that happens between teeing off and finishing a hole. Normally about four steps (or shots) -- but you have to deal with the unexpected: sand traps, water hazards, lost balls, free drops, collaboration with fellow players, unexpected consultation with the referee -- and so it goes on. Then there are 17 more holes to do." The result is an intricate and complex process with 18 targets but about 72 operations. Roth sees the move to knowledge-based workflow automation already occurring, at least with I-many. With more complex deals, there's reporting at every stage to see what stage the contract is in, to identify bottlenecks and such. "Soon, we'll support alternate variable language -- sections with pre-approved alterations from the standard contract--which can be swapped in and are indicated in reporting so the company knows what's being used," he says. The process moves based on what's needed, not just what's planned. Human involvement remains critical. "Worldwide, more and more routine work is gradually being automated and/or commoditized," Pyke writes. "So the skilled human work left over is more important than ever -- both to individuals, who are competing for a smaller and smaller number of interesting jobs, and to organizations, for whom skilled human work is becoming the only competitive differentiator left." Skilled human work typically isn't performed in a vacuum; it's collaborative. Yet in Pyke's view, our supposedly collaboration-friendly Internet communications are actually weakening collaboration by flooding us with documents and messages. Combined with poor management of the workforce, we're left with a need to collaborate better. "This means adopting a simple, general approach to collaboration -- one that meets both individual and organizational needs." Those needs include dealing with the unexpected. "This is not just about using a set of tools to deal with every anticipated business outcome or rule," Pyke writes; "we are talking about the management of true interaction that takes place between individuals and groups which cannot be predicted or encapsulated beforehand." One thing that has been holding back the expansion of WFA and BPM is the difficulty in coordinating a company's departments and infrastructure, something the advent of services-oriented architecture (SOA) will greatly simplify. Automation won't have to reside on one system, and that means processes can be extended throughout the organization, emphasizing the streamlined design of better workflows and processes. "As people become more mature in business, they naturally begin to notice how business process and business rules work -- what's good and what's not," Straus says. "The big win is to help people realize the difference between technique and technology, and to understand that how you make decisions is as critical as the decisions themselves." One approach to expanded workflow is case handling, which according to Pyke "might be thought of as any sort of business problem where, without technology support, a manila folder would have been used to store related documents and information about things of interest and tasks then associated with the contents -- an intelligent 'to do list' if you will." The key difference in a case handling environment is the ability to run multiple procedures against a given case of work -- "the primacy is with the case rather than the process that is used to support a work item, which means that the key concept of this approach is the body of work, the Case, not the typically modeled process of moving of work from one resource to another (where resource is a system, a work tray, or step in a process)," he writes. "Case handling systems leverage the capability to associate virtually any number of objects within the context of a case," he continues. "Processes tend to 'unfold' rather than rely on a priori design-time decisions (but within the context of an overall framework)." The system gains the ability to make decisions based on similar cases, allowing more sophisticated processes. "Clearly, the activities are related and cases follow typical patterns but the process becomes the 'recipe' for handling cases of a given type." This move toward sophisticated workflows combining automation with human interaction will have a major impact on the BPM market in the very near future, Pyke concludes. "BPM vendors with the right insight into the market will seize this opportunity and steal a significant [lead over] their competitors -- and it is fair to say that some of those vendors will be unable to respond to this growing need." Contact Senior Editor Marshall Lager at mlager@destinationCRM.com.
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