Collaboration Meets Process Integration

by Theresa Whitney

Remember business process reengineering (BPR) of the early '90s? Although it failed to revolutionize the IT industry, its basic technology principles are aligned with what is today called workflow. With workflow technologies, companies are streamlining and automating their mission-critical core processes, tying them seamlessly with internal and external business systems. As with BPR, the ultimate goal is to achieve enterprise flexibility and agility.

In the e-business world, it's no longer enough to drive inefficiencies out of back-office operations. Today, it's all about leveraging the Internet to drive new markets, channels, cost-efficiencies and customer-facing opportunities. Organizations today must integrate their internal systems and automate business processes. They must extend their businesses to employees, customers and partners. And they must connect with other enterprises and e-marketplaces.

What's more, the nature of e-business itself is expanding in scope, further accelerating the rate at which business transformation takes place. Existing IT systems are again being optimized, and in some instances replaced, to facilitate both internal and external business collaboration.

Through modern Web-based software tools, system-to-system integration along with business process automation (workflow) can now be enabled in real time among dispersed business stakeholders. Leading companies embracing these capabilities hope to realize unprecedented efficiencies and opportunities, as they define new markets and revenue opportunities and deliver higher levels of customer satisfaction.

Technology vendors are approaching this new era of workflow from a variety of vantage points, including the traditional workflow space (such as Documentum, FileNet and Staffware), the traditional enterprise application integration (EAI) or middleware space (such as Vitria, webMethods, and Tibco) and the traditional ERP space.

However, all vendors have the same goal in mind: enabling Web-based workflow to support collaborative commerce. Some call this "process automation," others call it "business process management." Essentially, complex and varied business processes are supported via a Web interface that needs minimal human intervention and yet supports collaborative commerce within a trading community.

For e-commerce to work for complex transactions, tools must be able to perform many of the traditional, robust document management and workflow functions, but also exchange information between trading partners easily, via the use of XML. Since these projects tend to be fairly dynamic, there is an emphasis on publishing and on the ability to update content rapidly and seamlessly.

In effect, the lines between EAI, business-to-business (B2B) integration, workflow, Electronic Data Interchange (EDI), business process management (BPM), content management and even ERP are blurring.

According to Bruce Bond, an analyst with Gartner Group, Stamford, CT, traditional ERP is "dead." Gartner coins the term ERP II as a model for business and application strategy that calls for a company to collect information through ERP-like processes and share the information with a trading community.

"Interacting with trading communities becomes crucial to collaboration," says Bond. "The ERP packages may use EAI capability or they may create their own functionality so they can take the information out of the ERP system and publish it in the trading community."

The Limits of Integration

Ultimately, e-business integration's goal is to eliminate the human interface altogether. While this works for many simple processes and transactions, more complex transactions often call for a human in case the process breaks down. Simply applying for a loan online, for example, calls for multiple stops and checks, invoking varied and complex business rules and algorithms.

Take banking, for example. In an increasingly competitive environment, banking organizations must enter the world of electronic commerce to acquire and sustain competitive advantage. By retaining existing customers and acquiring new ones, market share can be protected and grown. Yet customer demands are increasing, exerting additional pressures by expecting consistently higher levels of service.

With a greater range of communication and commerce channels available, such as the Web and WAP, customers also want increased convenience and a broader range of financial products and services to make banking more efficient, easier-to-use and faster. To succeed in this multichannel environment, banking organizations must maximize customer interaction and meet their demands by providing the same levels of functionality, service and performance from the Web as from the other available delivery channels.

Keeping up with customer demands means that banking organizations need to deploy scalable Web-based workflow solutions that are based on the latest technology, can fit within an organization's existing IT infrastructure and have the flexibility to adapt to sudden market changes. Moreover, these solutions must be collaborative but retain as little human intervention (until absolutely necessary) as possible.

Amid the turmoil, business processes in financial services still preserve many of their traditional characteristics, according to process automation expert Bruce Silver (see "Process Automation in the E-Business Era," online at www.transformmag.com). They remain structured, document-intensive and highly regulated: Efficiency in back-office operations still means the difference between making and losing money. And although many of the business rules and algorithms have been automated, human intervention is still required at most of the multiple stops and checks along the way of a transaction, especially a loan application.

During the 1990s, many banking institutions automated their paper-intensive business processes by implementing custom solutions on top of production-scalable document processing, document management and workflow automation platforms. Today, these same institutions must retool paper-based processes into e-processes, as the Web plays an ever-increasing role in customer-facing operations.

So far, customer-facing transactions over the Internet - such as applications for loans or insurance - are rare in financial services, according to Silver. He cites a survey by Mercer Management Consulting, New York, which found that while half its sample shopped online for books, music, travel and computers, only 5 percent did so for insurance, and only 0.2 percent actually purchased a policy online. Often, state regulations still require paper signatures at some point in the process.

Collaboration Complements Process Automation

With its legacy in the traditional workflow and document management arenas, Documentum, Pleasanton, CA, has taken great pains to brand itself as a way to "build e-business on trusted content." In particular, the Documentum 4i B2B Edition is designed to support collaborative processes - in this case in the B2B arena.

The B2B Edition enables interenterprise content exchange, global intercompany collaboration, supply chain integration and B2B application development. It also enables users within and beyond the firewall to contribute content to a secure repository and collaborate across the Internet by triggering automated workflows. This enables trading partners to collaborate on joint activities such as production design, contract negotiation and proposal development and submission. It promotes information sharing by supporting content exchange standards such ICE and SOAP.

Another company with roots in workflow is FileNet, Costa Mesa, CA, which now describes this technology as BPM. The company recently announced the beta program availability of Brightspire, an e-business framework for collaborative commerce that it says will be used to accelerate the development of a broad range of applications such as e-procurement, new account origination, collaborative selling and other customer-facing, self-service systems.

Through application templates, Brightspire accelerates the development of applications aimed at increasing the productivity of supply chains and expediting sales cycles. These processes can be extended to encompass participants inside and outside of the organization, in an "adaptive and interactive business environment."

Although it has its roots in EAI, Vitria, Sunnyvale, CA, has also adopted the BPM banner. Compared with traditional workflow and middleware, the Vitria BusinessWare integration server is said to offer BPM, EAI and B2B integration in a single unified architecture. This is said to allow companies to automate internal and external processes for end-to-end efficiency and visibility for complex applications.

After first defining mission-critical business processes - multistep activities that must be automated, such as order fulfillment or service provisioning - business analysts then create visual models of those processes using a point-and-click interface. BusinessWare process models span automation of business applications as well as human-oriented workflow. Workflows can be specified as individual steps or as complete subprocesses, for example, to support emergency escalation up to the level of manual intervention. This approach also supports the transition from semimanual to fully automated processes.

The next step is to use these process models to execute the processes, directing the flow of information as needed to and from a company's internal IT systems and over the Internet to the IT systems of its partners, suppliers and customers. Feedback information, gathered in real time while processes are executing, enables Vitria's BPM solution to optimize or adapt processes and subprocesses as needed.

Getty Images, Seattle, has announced that it will use Vitria's BusinessWare to integrate back- and front-end processes for its B2B Web site, gettyone.com. Gettyone.com enables graphics professionals to search across multiple brands of images, compare and purchase the results in a common lightbox and receive a single invoice for all images purchased.

Others in the EAI space touting the combination of automation and human interaction include Tibco Software, Palo Alto, CA. Tibco bills itself as the leading provider of "Total Business Integration solutions" for real-time collaborative commerce. Its solution is composed of three essential elements: Tibco ActiveEnterprise for business process integration and automation, Tibco ActivePortal for information aggregation and personalized interactivity via the Web and wireless devices, and Tibco ActiveExchange for B2B Integration with other enterprises and via electronic marketplaces.

Also from the EAI front, webMethods, Fairfax, VA, recently introduced version 4.5 of its webMethods integration platform, which it says addresses the three critical elements of business process automation: enterprise integration, mainframe integration, and business partner integration. According to Ivy Eckerman, spokesperson for webMethods, "Integration creates collaboration. Getting applications talking to each other - both intracompany as well as intercompany - sets up a collaborative commerce environment."

To that end, webMethods will be releasing an updated version of its Business Integrator product in September that adds more complex workflow processes. However, webMethods does not believe that its products will be completely automated. "It's not good business to have primarily no-human interface," says Eckerman. For example, banks often make real-time exceptions for key customers who are trying to use a credit card but have hit their maximum credit limit. "No matter how automated the system, a human must make the ultimate call," adds Eckerman.

A hybrid approach that maximizes automation and limits human intervention is best. This is what Michael Dell and other manufacturing gurus have come to call "frictionless trade:" that is, the perfect moment of Web-enabled business nirvana when an enterprise automatically reacts to stimuli from hundreds of sources, makes thousands of adjustments on the fly and gets products (and services) to customers quickly - with little, if any, human intervention.

Until the middle of last year, many of Dell's incoming orders were still handled manually by hundreds of employees. To cut the labor intensity of its order processing, Dell installed software from WebMethods that leverages the Web to allow instantaneous communication among suppliers' and distributors' internal business systems. For Dell, the first stage of this project is what it calls e-procurement. Essentially, a customer pulls product information directly from Dell's server into the customer's purchasing system, which creates an electronic requisition. After the requisition is approved online by the customer, a computer-generated purchase order streams back to Dell via the Web.

According to Dell, the system, which went live in the spring of 2000, has cut errors in its procurement processes from about 200 per million transactions to tens per million. This has helped Dell shave $40 to $50 off the cost of processing each order.

As solutions such as these become even more customer-facing as well as integrated with back-office workflows, organizations must grapple with how comfortable they are with these Web-based processes. They must decide how and when humans must step in, and they must be very careful in how they automate exceptions and error-handling.

Will there ever be a time when processes are completely Web-based and human-free? "An unequivocal no," says Andrew Warzecha, vice president of Electronic Business Strategies at Meta Group, Stamford, CT. In fact, organizations should maintain their traditional workflow processes before and after going to a Web-based workflow system. That way, organizations can slowly migrate their more complex processes to the Web and slowly automate escalations and exception processing.

To address the need for exception processing, detection of these transactions is only part of the answer, warns Warzecha. "The ability to get them routed to a subject matter expert [human], pull the necessary supporting information together and collaboratively work with the necessary people to resolve the issue becomes paramount," he says. Although no one vendor addresses the full spectrum of what Warzecha calls the "transaction automation" continuum, he says several companies are making strides, ranging from heavyweights like BEA and IBM to workflow companies like Optika and Staffware.

Whatever you call it - e-processing, BPM, business integration or process automation - and whatever the source of the technology - EAI vendors or established workflow providers - collaborative business processes combining automation and interaction are the next wave in bringing business online.

Theresa Whitney is Research Director for CMP Media's Business Critical Research, a research firm specializing in IT market intelligence. She can be reached at twhitney@cmp.com