© 2010 IBM Corporation Smarter Planet Means Smarter Processes October, 2010.

© 2010 IBM Corporation

Smarter Planet Means Smarter Processes

October, 2010

© 2010 IBM Corporation2

Smart Work for a Smarter Planet

AgendaAgenda

Why smarter processes?

The changing architecture of our businesses

A look at some journeys towards a smarter business



Yesterday’s Best In Class Is No Longer Good Enough

Workforce 26% more productive since 1990

Dock to Stock 50% faster in 2 years

Supplier Lead Time 62% faster in 2 years

IT Services 25% faster in 2 years



Report from 1500 CEOs: Agility is Required

“We have to be ‘change animals.’”

= to a large or very large extent

87% - More Volatile

86% - More Uncertain

82% - More Complex

74% - Structurally Different

Source: IBM Institute for Business Value 2010 Global CEO Study

Michele McKenziePresident and CEO,Canadian Tourism Commission

Responses show organizations experiencing significant change



The science of business process has advanced significantly over the past several decades

Source: David Knight

“The ability to change is far more

prized than the ability

to create in the first place.”

Business ProcessManagement

Howard Smith & Peter Fingar

1st Wave:

Taylorism

3rd Wave:

Business Process Management

(BPM)

2nd Wave:

Business Process Reengineering

4th Wave:

Business Performance

TQM, Six Sigma

Michael Hammer, Gary Rummler

Business Agility

IBM

Assembly Lines

Frederick Taylor



Today’s IT savvy business are combining two approaches to achieving smarter business infrastructure

SOA helps make the underlying technology that supports the business less rigid and more agile by integrating the business through linked,

repeatable business tasks, and services

BPM engages the business in continuous process improvement to flexibly automate a wide-range of business process, from the human-centric and ad-

hoc to the more documented and structured



Organizations are trying to embed new approaches to business change management into their IT infrastructures

This is transforming the way business operations & IT partner to approach the architecture of their business

Increase awareness by capturing relevant internal and external events

Improve decision making through a better understanding of business conditions

Deliver greater flexibility and control over and measurement of business activities

Competitor Introduces

New Product

Competitor Introduces

New Product

Supplier Pricing Trends

Supplier Pricing Trends

Customer Issue

Resolution

Customer Issue

Resolution

Introduce Promotional

Product Offers

Introduce Promotional

Product Offers

Changing Customer

Buying Patterns

Changing Customer

Buying Patterns

Customers Abandon Shopping

Carts

Customers Abandon Shopping

Carts



A smarter business architecture means a more intelligent, smarter business

Insurance companies will make marketing offers based on events or patterns displayed by their customers

Communication Service Providers will use past usage trends to offer customers more suitable plans when usage rates near their limits

Retail companies will send personalized promotional offers to high value customers with abandoned shopping carts

Oil companies will optimize oil production by alerting operators of reservoir changes and recommended corrective actions



AgendaAgenda






Tools for a smarter business architecture

Rules

Analytics

Adapt and respond dynamically by automating decisions

Solve complex business problems and predict outcomes for strategic decisions and actionsEvents

Content

Detect changing business situations by capturing and correlating events from multiple sources

Seamlessly integrating active content with automated business activities

Collaboration

Improve business performance by enabling your internal and external business network to work together

Foundational element enables dynamic modification of business processes as business needs changeProcess

Monitoring

Identify performance gaps and improvement opportunities by monitoring business activities in real-time

Collect new information required to take advantage of new business opportunities

Information

The architecture of our business are undergoing an evolution

Business Application

Services

Strategy and Planning Services

Enterprise Service Bus

Access Services

Partner Services

Process Services

Information Services

Interaction Services

Business Services and Events

Lifecycle Services

Asset and Registry Services

Development Services

Management Services

Infrastructure Services


Services



Access Services

Partner Services

Process Services




Lifecycle Services



Management Services



Services



Access Services

Partner Services

Process Services




Lifecycle Services



Management Services


Business Outcomes

Business Agility

En

terp

rise

Str

ateg

y an

d P

lan

nin

g

SOA Foundation

Lifecycle Services

A reference model for the new business architecture

Banking Insurance Health Care Telecom Retail Government:

Performance Management

Business Outcomes

Business Agility

En

terp

rise

Str

ateg

y an

d P

lan

nin

g

SOA Foundation

Monitoring and Management

Services

Model and Development

Services

Access Services


Business Application Services

Interaction and Collaboration Services

Process and Decision Services

Information and Analytic Services

Partner Services

Infrastructure and Virtualization Services

Complexity Management

Risk ManagementDecision

ManagementCase Management

Compliance Management

Business EfficiencyPolicy ManagementGovernanceSecurity

Management


Others

Improved customer sat & retention

Improved consistency

Reduced operational costs

Improved cross-business unit coord

Better and faster opportunity id

More successful promotions

Maximized productivity

Expanded market share

Improved customer acquisition

…

Bus Events Bus Rules MonitoringContentAnalytics Collaboration InformationProcess

Approaching the reference architecture from a “business outcome” view

This view is the topmost layer of the Reference Model.The Business Outcomes View focuses on improved business outcomes in the functions the business performs through the adoption of business agility techniques.

Business Agility Capabilities

Sense and Predict

Respond Enforce and Comply Measure

EnterpriseStrategy

andPlanning

Banking Insurance Health Care Telecom Retail Government Others

Order to Cash On-boarding CustomerCare

CustomerInsight

Procurement to Pay

Fulfillment

Fraud Detection

Campaign Management

Order Handling

Risk Management

Regulatory Compliance

Portfolioto Orders

Prod Lifecycle Management

AccountReconciliation

ClaimsManagement

Market & OfferManagement

Provider & Supplier Mgmt …

Business Use Cases

Improved customer sat & retention

Improved consistency

Reduced operational costs

Improved cross-business unit coord

Better and faster opportunity id

More successful promotions

Maximized productivity

Expanded market share

Improved customer acquisition

…

Business Agility Outcomes

Business Agility Disciplines

We must then leverage our tools of business architecture todetermine the “how” of achieving these business outcomes The Business Agility Enablement layer encapsulates the capabilities the business can employ to achieve more agile business outcomes:

• Business Design Enablers that enable the business to be the facilitators of business agility• Business disciplines that enable a business to successfully design and run an agile business

Business Process Optimization Foundation

SCM CRM HR PLM …….Finance

Existing Business Systems

Sense and Predict Respond Enforce and Comply

Measure

Business Agility Enablers

EnterpriseStrategy

andPlanning

Bus Events Bus Rules MonitoringContentAnalytics Collaboration InformationProcess

Business Functions and Outcomes

Performance Management

Complexity Management

Risk Management

Decision Management

Case Management

Compliance Management

Business Efficiency

Policy Management

GovernanceSecurity

Management

The “how” is ultimately mapped to and instantiated by a IT architecture to achieve better business performance

This view reinforces that the reference model is fundamentally based on SOA and BPM.The Foundation View encapsulates the technical capabilities that enable the business to enact business agility

Interaction and Collaboration Services

Enables role-based user experiences and

collaboration

Dynamic Process and Decision Services

Orchestrate and automate business processes and

decisions

Information and Analytic ServicesManage and analyze

diverse data and content in a unified mannerModel and

DevelopmentServices

Integrated environment

for modeling, design,

simulation and creation of

solution assets

Partner Services

Connect with trading partners

Business Application Services

Build on a robust, scaleable, and secure services environment

Access ServicesFacilitate interactions with existing information and

application assets

Monitoring and

Management Services

Monitor, manage and

secure business policies,

processes, decisions &

events; services,

applications &

resourcesInfrastructure and Virtualization ServicesOptimizes throughput, availability and utilization

Enterprise Service Bus Connect and mediate services and events

EnterpriseStrategy

andPlanning

Business Agility Enablers and Disciplines


Lifecycle Services



AgendaAgenda






In a Time When Patients Live, Work, Seek Care in New Ways

People expect to interact with healthcare practitioners when personally convenient

– Easy access to doctors, hospitals and each other - anytime, anywhere

– More meaningful interactions, supported by the right information at the right time

– Rising expectations compel improvements

in speed, accuracy, personalization, privacy and security

Focus is expanding from reactive, acute care to prevention and wellness

How do we deliver collaborative care?by connecting people, care teams and information



University College London Hospital now has fewer Patient Delays, reduction in Patient Complaints, and greater insight into Resource Planning. - That’s Smart Healthcare!

CHALLENGE:Quickly implement the new UK government policy: “18 Week RTT” and measure end-to-end Patient ‘pathway’

SOLUTION:A Patient Tracking System (PTS) that can signal when a patient is delayed in their treatment pathway and simplicity and accurately enter Patient details once on to the system rather than multiple entries



UCLH implements a new Patient Tracking System

Billing / Referral Fees

Patient Appointment / Admissions

Electronic Patient Records System

Map key components of business processes Patient

Satisfaction



UCLH – Business Outcomes improve through better Process Management and Work TrackingQuickly finds ₤3M in Referral Fees with new Patient Tracking System (PTS)

BENEFITS: Reduction in patient errors in processing appointments, admissions, multiple entries, etc Decrease in number of patient complaints regarding administrative processes A recovery of ₤3 million Referral fees though this new PTS

A provider of health services in the United Kingdom improves its processes to recover GBP3 million in fees when it implements IBM WebSphere Lombardi Edition and IBM BPM Blueprint software

A provider of health services in the United Kingdom improves its processes to recover GBP3 million in fees when it implements IBM WebSphere Lombardi Edition and IBM BPM Blueprint software

Real-time Collaboration on Patient Records



In tough economic times we expect Airlines to operate Reliably, Safely, Efficiently and be Social and Environmentally committed

In past 20 years, Airline strategies to profitability have changed dramatically;– Airlines are more volatile due to consumer

confidence, business travel, regional economic and political issues

– Government deregulation, ‘no-frill fares’ efficiencies, outsourcing of operations help improve yields and better manage capacity

About 1% more passengers traveled in August 2010 but average price to fly one mile rose 14%

• According to the ATA , passenger revenue rose 17% in August 2010 compared to the same month in 2009

How do Airlines remain competitive and viable?by dynamically improving their business processes between customers, employees and operations

“…Money never sleeps, pal …”



British Airways increases Upgrade Revenue and improves Business Visibility - That’s a Flying Smart!

CHALLENGE:Increase upgrade revenues via ba.com through improved exploitation of commercial opportunities.

SOLUTION:

Flexible IT infrastructure while reducing IT costs by adopting IBM WebSphere ILOG JRules V6.7.3 software in an SOA configuration. Manage upgrade eligibility and business rules pricing calculations for its mission-critical Website



British Airways Redefining Flexibility of the Upgrade process

Availability

3rd partiesRe-booking & Re-ticketing

during disruptions

Customers

Staff

Pricing decisions

Rules services



Optimizing Business Performance at British Airways

Real-Time Dynamic

Optimizationof Operations

Benefits: Increased Upgrade Revenue Improved targeting of the commercial market and quick reactions to

a fast-moving environment

Drastically reduced time to market by allowing business users to amend rules without IT involvement

Improved business visibility of upgrade propositions and pricing logic



Today, Utilities realize that they need a ‘Smarter Grid’ then what Thomas Edison envisioned!

Energy Grids need to be able to transform its business to meet the new energy landscape;– Monitor grid operation and Outage monitor

(vs you call us) with high-speed, near real-time, two-way communications

– Sensors enabling rapid diagnosis and corrections and repair

Leverage the power of information to improve system design and operation, improved reliability, Improved efficiency and meeting customer needs

How can Utility companies can solve Humanity’s top issue?by leveraging information provided by technology and make efficient use of existing infrastructure assets

Humanity’s Top 10 Problems for next 50

yearsEnergyWaterFoodEnvironmentPovertyTerrorism & WarDiseaseEducationDemocracyPopulation

- R. Smalley, Rice University



Dong Energy – Employed Smarter Operations to increase Quality of Service by making the most of the Intelligent Electrical Grid

CHALLENGE:Increasing marketplace and regulatory demands drove Danish utility company DONG Energy to look for a way to better respond to outages faster and more efficiently

SOLUTION:

DONG Energy teamed with IBM to implement an Intelligent Utility Network, installing remote monitoring and control devices that give the company an unprecedented amount of information about the current state of the grid. The new solution also involves extensive analysis of the data provided by the remote devices, as well as reengineering of DONG Energy’s business processes.



Dong Energy redefines Quality of Service with new Intelligent Utility Network

Smart Devices Intelligent Management of Physical Assets Grid Integration with Existing IT Systems and Applications

GeneratingPlant

Residence

SOA-based Control Center

Problem Detection

Response



28

Smarter Industry Interconnection Turns Information into Power at DONG Energy

Real-time instrumentation

and smart interconnection

BENEFITS: 25-50% reduction in outages Up to 90% savings of new capital

expenditures Fault search time reduced 33%

“"It turns out that the real key isn't the fact that we've got visibility into the grid, though that was our initial goal. It's that we now have information available on grid performance that we didn't have before. We can do a lot with that information.“ — Peter Vinter, power grid specialist, DONG Energy



Let’s Work Smarter Together

© 2010 IBM Corporation Smarter Planet Means Smarter Processes October, 2010.

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