BPM Keeps Pace With Business Changes

 
 
By Tony Kontzer  |  Posted 2012-02-09
 
 
 

Walk into one of the Athletes’ Performance fitness centers scattered around the country, and you’ll find that each computer-controlled piece of exercise equipment has been updated with the specific settings and instructions for each regular client. Enabling its highly skilled trainers to tailor personal workout plans for a large number of customers allowed the chain to quickly scale its expert-driven business model and rapidly expand the business.

In the past, the company—known for training some of the world’s top athletes, including the Los Angeles Dodgers, Olympic teams, NFL players, and the German soccer team—relied on its expert  staff to apply its steady flow of research findings in fields such as nutrition, metabolism and neuro-science. But management was ready to take its sophisticated approach to fitness directly to the consumer with a network of consumer training facilities called Core Performance.

To achieve that goal, Athletes’ Performance had to automate the process used to adopt rules so that it could deliver its services at a consumer-friendly price. One thing stood in the way: The company needed a simpler way to distribute the rule set that guided its customized training regimens.

Backed by an open-source IT environment, Athletes’ Performance looked at Drools, but eventually chose the rule-management system sold by ILOG (later acquired by IBM) because of its speed and flexibility. By fall 2008, Athletes’ Performance had put an implementation of the renamed IBM WebSphere ILOG JRules into production with about 23,000 rules, according to CTO Jon Zerden.

Using ILOG as it would a business process management (BPM) system, the company was able to change everything about how it incorporated business rules—from shedding its reliance on Excel spreadsheets and the knowledge in its trainers’ heads to slashing the amount of time it takes to complete research studies and change its rule set.

Most importantly, Athletes’ Performance could instantly deploy rules to all its facilities, with its computerized workout equipment automatically adjusting settings for each client and providing specific instructions to trainers. That, in turn, allowed the firm to scale its business to service consumers much more cost-effectively than it could its elite athlete clients. While up to 14 of the company’s specialists work with any given professional athlete, each trainer at the Core Performance facilities can work with up to 16 consumer clients at a time.

“We’ve used the technology to automate the rules and bring speed and consistency to the methodology,” says Zerden. “BPM has allowed us to adjust the rules in a much more granular and expeditious way as the market evolves—and to do it at a much more palatable price point.”

 

BPM Market Is Growing

Such stories are the reason BPM technology is on the rise. In a July 2011 report, Wintergreen Research predicted that the BPM market, which it pegged at $2.3 billion in 2010, will grow to $5.5 billion by 2017. Clay Richardson, senior analyst at Forrester Research, predicts that the market for BPM software—which is typically Web-based, with integration into back-end systems—will exceed $3 billion this year, with large companies investing as much as $15 million in a BPM solution.

“Companies using BPM technology can analyze business processes and identify opportunities to become more efficient, more cost-effective and more profitable,” says Richardson.

Unfortunately, many companies don’t realize that they need BPM. Richardson points out, for instance, that a company may not know that two separate groups are managing identical processes in very different ways. That situation, if addressed, can yield cost reductions of as much as 20 percent.

Consider Liquid Controls, which wasn’t looking to head down the BPM path in 2004 when it set out to address a simple problem. The maker of liquid-flow meters and measurement equipment, based in Lake Bluff, Ill., needed to get a handle on the hundreds of documents detailing how it builds its products—all of which were stored as an unwieldy collection of paper files. That made it tough to keep track of the constant changes to those instructions.

After deploying a Web-based workflow tool with document management capabilities from iMarkup (since renamed BP Logix), the company was able to speed up product assembly and simplify the internal auditing process.

Over time, as Liquid Controls discovered the value that workflow features could bring to other processes bogged down by manual procedures, the software (now called Process Director) evolved into a more powerful BPM solution. That enabled the company to build business process models to provide new visibility into where bottlenecks were occurring, says Bruce Lawrence, group network manager.

It wasn’t long before employees responsible for processes such as order management or measuring the accuracy of products—both of which had previously been done manually, resulting in lost paperwork, inaccurate information and lots of wasted time—were benefiting from dashboard views of each process, complete with up-to-date related financial data and a clear picture of where each step in a process stood.

The impact has been tangible. Lawrence says 85 percent of orders are now entered within 24 hours, up from 60 percent prior to the BP Logix deployment. In addition, equipment repairs and calibrations are now completed in 20 days, less than half of the 44 days that they used to take.

Other processes—such as issuing credit memos, approving credit and payment terms, and making approved changes to address book entries—have been shortened by one-third or more, simply by replacing all the hard-to-track paperwork with automated workflows that give employees visibility into the end-to-end processes to which they contribute.

“Knowledge is power,” says Lawrence. “You know where things are being hung up, rather than wasting your precious time during the day tracking something down.”

Still, with 60 processes now running in its BP Logix system, Liquid Controls has only skimmed the surface of the software’s potential to refine its business, says Lawrence. “It’s getting to the point where it is providing information that will help us improve,” he says. “I think a company would be foolish not to have [BPM software] in place.”

 

Starting Down the BPM Path

Liquid Controls’ inadvertent adoption of BPM serves as a textbook example of how the technology can work its way into an organization. Bob Scott, leader of the BPM global service line at IT consultancy Capgemini, says most companies don’t start down the path to a BPM deployment by taking stock of their processes and identifying possible improvements. Instead, they are looking to solve a much smaller problem.

“When I’m talking to clients, they rarely say, 'I want to buy a BPM solution,’” says Scott. “What they say is, 'It’s clear we have a problem with our warranty management system.’”

That said, business and IT managers are likely to find themselves looking at BPM technology in the coming years as they’re forced to contend with one big change or another. In a recent survey, Technology Evaluation Centers found that over the next five years, 35 percent of business managers expect their companies to make acquisitions or divestitures; 39 percent anticipate a change in their company’s business model; and 57 percent expect to expand into new lines of business.

Such large-scale events are expected to become a driver for increased BPM adoption. Experts like Scott say that the technology is becoming increasingly critical as companies—especially those saddled by aging legacy technologies—struggle to refine their business processes quickly enough to keep up with the fast-evolving marketplace.

“When asked to introduce a new service, legacy systems often can’t do it, or they require nine months to make it happen,” says Scott. “In the current market, nine months just does not cut the mustard anymore. You’ve either missed your market opportunity or lost your customer.”

Consider how BPM provided Athletes’ Performance with the agility to offer fitness training to consumers and corporate wellness services to companies. Shortly after the Athletes’ Performance ILOG deployment had wrapped up, corporations began inquiring about fitness programs for their employees. With its newfound ability to deliver more cost-effective services, the company gladly obliged.

Today, in addition to its four Athletes’ Performance facilities, the company provides fitness training to consumers and corporate clients at six Core Performance centers around the country. It also plans to increase that number “significantly” in 2012, according to a company spokeswoman.

What’s more, the company’s revenue has more than doubled in the three years since the ILOG system went live—a compelling return on investment, to be sure. With corporate wellness now the fastest growing part of the business, says Zerden, the investment in BPM should look even better down the road.

It’s clear from the experiences of Athletes’ Performance and Liquid Controls that BPM technology can deliver far-reaching benefits. As more enterprises rethink their processes to keep up with an increasingly connected and real-time world, BPM could find itself beside ERP, HR and CRM as one of the staples of an enterprise IT stack that brings real value to the business.