BAM Overview - Software AG

7/27/2019 BAM Overview - Software AG

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BAM & BPM:working together to deliverend-to-end process visibility

AMER Technology Premier Partner Software AG

Contact Benjamin Joseph 630 977 9779

[email protected]


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BAM + BPM = Process Visibility | August 2008 | Page 2

Agenda

Measure First: BAM as the foundation for BPM

5 steps to implementing BPM

Case Studies throughout


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Software AGs Business Infrastructure Technology

/various systems

BAM

BPM


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Productivity drives most process improvement initiatives

5%

13%

13%

19%

21%

23%

31%

33%

33%

34%

36%

47%

51%

71%

We are not embarking on a process

improvement initiative

Reduce manufacturing raw goods costs

Enhance stock price/investor value

Improve inventory performance

Reduce supplier cost

Improve yield

Improve delivery performance

Improve utilization of capacity

Enhance revenue

Reduce labor costs

Building a continuous improvement culture

Increase customer satisfaction

Eliminate wasteful process steps/activities

Improve productivity

What are your reasons from the following list for embarking on your process improvement initiative?

Source: October 2007 North American Business Process And Applications Online Survey

Base: 215 business process and applications professionals (multiple responses accepted)

What is yourOrganizationprepared to

measure?


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The Kinds of Processes Our Customers are Automating,Monitoring, Managing and Improving

Financial

Services

Inbound Correspondence

Processing

Loan Processing

Month-end Close

Payments Claims Processing

Client Valuations

Securities Trading

Supply Chain

& Operations

Order to Cash

Procure to Pay

Inventory Replenishment

Distribution Network

Delivery Visibility Product Recall

Trouble Ticket / Service

Calls Outage Management

Medical History Data

Exchange New Product Introduction

Customer Onboarding

Employee Onboarding

Service Fulfillment


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Critical CapabilitiesProcess-centric Business / Demand Driven Supply Chain / Manage by Exception

Raise the Bar

Understand baselines and variability Support CPI (e.g., Lean & Six Sigma)

Leverage best practices

Effectively Manage Risk Identify, predict, and

respond to exceptions Orchestrate a consistent

response Be in compliance (SOX,

Trade, SLAs)

Change the Game Tailor processes to key

customers, tradingpartners

Enable rapidly adaptivebusiness models

Provide ProcessTransparency

Document the full process Get end-to-end visibility Extend processes to trading

partners


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Mapping Business Process Capabilities to a Specific ProcessOrder to Cash

Business Process

Capabilities Order to Cash

Visibility Predict late shipments due to orders accepted within LT, orders stuck in

port, etc.; Monitor end-to-end O2C cycle time

Risk Avoidance Establish an integrated SLA Management framework with customers

Operational

Excellence Respond rapidly and efficiently to high volume of order exceptionsProcess

Innovation

Create tailored processes to serve different customer groups efficiently

and profitably

Sample


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Introduction to BAM:Measure First



It All Starts with a ProcessGeneric Order-to-Cash Scenario

Sample

Review Order

Check OrderCompliance

Receive CustomerOrder

Receive Shipment

Transmit PO toSupplier

GenerateInvoice

Custom BillingSystem

Ship Goods

Prepare ShippingDocuments

Ship to FFGenerate PackShip

Customer Submit PO Pay Invoice

Create Factory PO

Create SalesOrder

Update Shipping

Docs and Changes

Consolidate Boxes



How does BAM provide value?

Linked to the Business TopographyFollows the landscape of your business process - more than datawarehouse reporting - includes key in-between steps to providefull process visibility in real time!

Allows Intelligent Self-learningMonitors KPIs and builds a knowledge base of performance statisticsbased on time-centric criteria (e.g. time-of-day / time-of-week).which generate statistical boundaries based on historical patterns.

Provides Fingerprinting and Predictive alertingCompares current and historical activity to anticipate exceptions.Proactively notifies BAM users of exceptions.

(Alert via email, web services or SNMP traps)

Enterprise can react before situation becomes critical.

Supports Six Sigma AnalysisTracks rule violations, exceptions and process defects to enable SixSigma analysis and Pareto (80/20) charts. Intelligent prioritizationdrives faster process improvements with fewer resources.

Alert



BAMs Main Monitoring Categories

Volumes: Counts of events,

quantities, any numeric-

based KPI

Velocities: Cycle-times,

time remaining till adeadline, any time based

KPI

Errors: Systems, sequence,

duplicates, timeouts,

matching, content baseddefects

Special conditions: Events

of interest, confluences

of KPIs, complex pattern

recognition



BAM Monitors Volumes How many? How much?

Transaction revenue

Number of transactions

Cost

Margin

By Line of business By Process

Number of changes in a record

Number of calls

Number of tickets closed Number of process events

Number of compliance events

for audit



Case Study: Seeing Whats Not There (Volume = 0)

Company High Tech Manufacturing firm

Operational

Challenge

Relies heavily on B2B transactions to drive revenue, but had no

visibility into the absence of events

Sample Pain

in the

Process

The company did not receive any orders from one of its major

customers for 8 days. There was no trigger to alert B2B Operations

group. As a result of missing a weeks worth of orders from this

major customer, the company did not meet its quarterly numbers.

Results Customers B2B Gateway investigated and fixed in 3 days

Establishing alerts to detect absence of orders from keycustomers

Extending

the Reach

Uncompleted activities, lack of closure, no escalation path



BAM Monitors Velocities How fast? How long?

Velocities: The time-based component of

transaction steps or overall process

measurements

End-to-end Process cycle-time Cycle-times of individual steps

Wait-times between events

Time remaining to completion / Deadline

Management

Life-time of trouble ticket



Case Study: Meeting Time-based Service Level Agreements

Company Health Care Services division of a major pharmaceutical company

Operational

Challenge

Demands to support a direct to customer distribution model

dramatically increased requirements for supply chain availability

and flexibility

Sample Pain

in the

Process

Company promises overnight delivery of medical devices to support

health care providers, but found any exception (EDI problem, data

consistency issue) could sideline an order in an exception queue for

long enough to miss the overnight window.

Results Problem resolution times slashed by 75%

Perfect order scores improved to over 99% Improved service levels

Reduction in shipping premiums and scrap

Extending

the Reach

Real-time Deadline Management based on process steps

Ability to support aggressive SLAs as a competitive differentiator



BAM Monitors Errors How good?

Identifies, counts and measures errors to helpimprove understanding of the problems todrive closure.

With end-to-end monitoring helps understandprocess errors at the transaction level.

Incidents / Problems SLA Violations Bottlenecks in processes Rule violations Duplicate transactions

Time-outs



Case Study: Operational Visibility Where am I broken?

Company Major Communication provider of data, voice & video in the U.S.

Operational

Challenge

Network Operations had little visibility into problem location and

status of their HFC Network

Sample Pain

in the

Process

If a network element (amplifier, tap, splitter) fails, the only

visibility is at the customer modem level. The company would roll

Field Service trucks to individual customers, not knowing the

problem resides upstream in the Network.

Results Pilot / Prototype indicated a Network alert one hour before the

customer called in with a complaint.

Network visibility model provides Points of Interest, indicatingfailure point.

BAM to monitor health metrics (SNR, Rx, Tx) to predict problems

before failure occurs

Extending

the Reach

Other network-based visibility: Utilities, Cell Towers, Pipelines


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BAM Monitors Special Conditions How normal?

Transactions greater thana set limit

The absence of expectedactivity

Combination of volumes,velocities and errormeasurement

Start and end events forspecific processes orcritical business situations

The speed of repair orrecovery activities

BAM & BPM allowbusiness operations tomanage by exception


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Case Study: Understanding Normal Operations

Company Electronic Products Company

Operational

Challenge

Incorrect incoming orders may trigger unwanted activity for

suppliers and manufacturing

Sample Painin the

Process

Product order from one of their resellers came in for one millionunits significant effort and coordination was needed to ramp up

supplier materials and manufacturing to meet demand. This order

was in error!

Results Identified the Resellers normal order pattern

Order was off by 2 decimal places

Created business rule to alert future issues

Extending

the Reach Capture currency translation errors (, $,, )


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Case Study: Fraud Detection / Pattern Recognition

Company Major U.S. Satellite Television provider

Operational

Challenge

Invisible fraudulent activities

Sample Pain

in the

Process

Users would repeatedly register for service Friday night and cancel

by Sunday night. Short duration of delivered service never

triggered a billing cycle, thus allowing free service.

Results Used BAM to identify patterns in behavior: ordering service

Friday night, cancelling Sunday night

Put in place monitors to detect future behavior

Reduced fraudulent activity

Extending

the Reach

Other complex pattern recognition: fraudulent credit card

usage, Anti-Money Laundering


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ExceptionSub-Process

Accept Reject Escalate

ErrorHandling Exception

Handling

DecisionSupport

Review Order



Receive Shipment


GenerateInvoice


Ship Goods




Create Factory PO

Create SalesOrder

Update ShippingDocs and Changes

Consolidate Boxes

KPI KPI KPI

KPI

KPI

KPI

1. Establish Process2. Determine KPIs &

Measure Baseline

3. OrchestrateAND (if required)

Redesign Process

Measure First: BAM & BPM

KPI


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Case Study: Using BPM to Orchestrate the Process

Company A top 50 US retail and commercial bank

Operational

Challenge

M&A: Aggressive growth by acquisition resulted in manual processes

and disparate, disconnected systems.

Sample Pain

in the

Process

Before implementing an automated process for address changes, it

took more than seven employees working 6 hours per day to

handle the 30,000 monthly requests

Results Resource requirements reduced by over 85%

20% incremental increase in address changes handled

Extending

the Reach

Other manual processes: customer / partner / employee on-

boarding


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ExceptionSub-Process

Accept Reject Escalate

ErrorHandling Exception

Handling

DecisionSupport

Review Order



Receive Shipment


GenerateInvoice


Ship Goods




Create Factory PO

Create SalesOrder

Update ShippingDocs and Changes

Consolidate Boxes

KPI KPI KPI

KPI

KPI

KPI

1. Establish Process2. Determine KPIs &

Measure Baseline

3. OrchestrateAND (if required)

Redesign Process

4. Identify Process

Improvements

Measure First: BAM & BPM

KPI

5. Play It Again Sam


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Lean-based KPIs: Measuring Muda (waste)

Transport Number & cost of Transportation process steps

Cycle time of transportation process steps

Waiting Process bottlenecks (#/time)

Time-outs (#/time)

Wait times between events (#/time)

Over production Cycle time between goods completion and ship to customer

Duplicate transactions (#/$)

Defects Defect PPM (#/$/%)

Errors handled (#/$)

SLA violations (#/$)

Rule violations (#/$)

Inventory False demand triggers (#/$)

Motion Unnecessary activity in a human/task part of the process

Extra processing Unnecessary transaction approvals (#/$)

Rework activities (#/$)


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Lean-based KPIs: Measuring Mura & Muri

MuraUnevenness /

Unnecessary

variation

End-to-end Process cycle-time (mean/variance)

Cycle-times of individual steps (mean/variance)

Time remaining to completion

Absence of expected activity

Combination measurements of volumes, velocities and errors Speed of repair or recovery activities

Cycle time of QA / Testing activities

Muri

Overburden /Over doing

Excess / non-value-add process steps

Excessive transactions

Manual prioritization

BAM Storm excess alerts

Limited / Restricted re-use of tools and processes


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Thank You!

BAM Overview - Software AG

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