Pega Intelligent BPM The Next Wave For Customer Centric Business Applicationskhoshafian11 140809041228 Phpapp02 PDF

Nathaniel Palmer, Editor in Chief, BPM.
com
In this easy to read and understand book, Dr. Khoshafian persuasively lays out the case to
organizations of all types regarding the integrative capabilities of intelligent business process
management (iBPM). From service integration to content management, business rules to
mobile/social, lean-six-sigma to agile process development, Khoshafian shows how these are
inter-related facets of the next wave in process thinking. If youre seeking to achieve
sustainable competitive advantage through agile execution, you want to read this book.
Dr. Richard J. Welke Ph.D., Director, Center for Process Innovation and Professor of Computer
Information Systems, Robinson College of Business, Georgia State University (Atlanta, GA).
Dr. Khoshafians book provides an excellent exposition of how intelligent BPM can become a
core enabler for business transformation. It gives a clear understanding of how emerging
trends such as social, mobile, dynamic case management, the cloud, and real-time
decisioning are playing a key role for agencies that want to adapt, while cutting costs and
being increasingly responsive to their stakeholders. Fitting and leveraging iBPM from
business enablement to business architectures with clear practical examples makes an
excellent read for organizations that are on a business transformation journey.
Douglas Averill, State of Maine, Director Business Process Management
Copyright 2013 Pegasystems Inc. All rights reserved.

All trademarks are the property of their respective owners.
DR. SETRAG KHOSHAFIAN
About Pegasystems
Pegasystems revolutionizes how leading organizations optimize the customer experience and automate
operations. Our patented Build for Change technology empowers business people to create and evolve their
critical business systems. Pegasystems is the recognized leader in business process management (BPM) and
is also ranked as a leader in customer relationship management (CRM) software by leading industry analysts.
INTELLIGENT BPM THE NEXT WAVE FOR CUSTOMER-CENTRIC BUSINESS APPLICATIONS
For over two decades, Dr. Khoshafian has articulated a clear vision for the business
consequences of emerging technologies. His latest book sets the bar even higher, by pulling
together all the pieces of intelligent BPM and explaining them the context of a rapidly
evolving mobile, social and cloud based business environment. A must read for all managers
and executives seeking competitive advantage.
INTELLIGENT BPM
THE NEXT WAVE
FOR CUSTOMER-CENTRIC BUSINESS APPLICATIONS

FOREWORD BY ALAN TREFLER
INTELLIGENT BPM
THE NEXT WAVE
FOR CUSTOMER-CENTRIC BUSINESS APPLICATIONS

FOREWORD BY ALAN TREFLER
2014 Pegasystems Inc.

Pegasystems Inc.
One Rogers St.
Cambridge, MA 02142
www.pega.com
All rights reserved. No part of this book may be reproduced in any form by any
electronic or mechanical means (including photocopying, recording, or information
storage and retrieval) without written permission from the author or publisher.
ISBN 978-0-615-51512-0 Trademark notice: Product or corporate names may
be trademarks or registered trademarks, and are used only for identification and
explanation without intent to infringe.
TABLE OF CONTENTS
Foreword.................................................................................................................. 9
About the Author.................................................................................................... 13
Acknowledgements............................................................................................... 15
Chapter 1 - What is iBPM?..................................................................................... 19
Policies and Procedures............................................................................................ 19
Execution Gaps........................................................................................................... 20
Business: The B in iBPM........................................................................................ 21
Process: The P in iBPM.......................................................................................... 23
Management: The M in iBPM................................................................................ 24
The i in iBPM........................................................................................................... 25
The Evolution of iBPM................................................................................................ 27
Chapter 2 - Who Benefits from iBPM?................................................................... 31
Benefits for Customers: Transforming the Customer Experience........................ 31
Optimizing Operations: Benefits for Operators....................................................... 34
Benefits for the Business.......................................................................................... 36
Productivity Gains and Other Benefits for IT............................................................ 38
iBPM for the Enterprise............................................................................................. 41
Example: Insurance Organization Delivers Staggering Global Results........................ 42
Chapter 3 - How Can You Succeed With Intelligent BPM?..................................... 43
Focusing on Business Objectives.............................................................................. 44
Continuous Improvement Methodology................................................................... 46
Center of Excellence.................................................................................................. 46
COE Governance......................................................................................................... 48
Succeeding with iBPM............................................................................................... 49
iBPM: The Next Wave for Customer-Centric Business Applications
Pitfalls That Prevent iBPM Success......................................................................... 50

Example: Center of Excellence in Financial Services..................................................... 52
Chapter 4 - Business Rules and Analytics for the i in iBPM............................... 53
Business Rules........................................................................................................... 53
Business Insight from Business Data for Business Decisions.............................. 55
Enterprise Performance Management.................................................................... 56
Contextual and Situational Intelligence.................................................................... 57
Predictive iBPM.......................................................................................................... 58
Adaptive iBPM............................................................................................................ 59
From Business Intelligence to Intelligent BPM....................................................... 61
Example: Handling Customers Intelligently.................................................................... 63
Chapter 5 - The Road to SOA Success Runs through iBPM.................................... 65
Business Perspective of SOE.................................................................................... 65
Technological Perspectives....................................................................................... 67
Cultural Perspective of SOE...................................................................................... 69
iBPM and SOA............................................................................................................ 70
iBPM Helps Organizations Succeed with SOA......................................................... 72
Example: iBPM and SOA in the Public Sector................................................................. 75
Chapter 6 - Social Networking and Mobile iBPM................................................... 77
Collaborating Via Mobile on the Cloud..................................................................... 78
Why Social Networking and Collaboration?............................................................. 79
Social iBPM................................................................................................................. 80
Continuous Improvement with Social....................................................................... 81
Mobile and Social for All Phases and All Communities.......................................... 82
Analytics and Social iBPM......................................................................................... 84
How about Mobile iBPM?.......................................................................................... 86
Example: Mobile iBPM Payments.................................................................................... 89
Table of Contents
Chapter 7 - Legacy Modernization through iBPM.................................................. 91

Why Do Legacy Modernization Initiatives Fail?........................................................ 92
How does iBPM Help Legacy Modernization?......................................................... 95
The Journey to Application Rationalization through iBPM..................................... 99
The Value of Modernization with iBPM................................................................... 101
Example: Modernizing for the Future............................................................................ 103
Chapter 8 - Real-Time Lean Six Sigma................................................................ 105
Real-Time Lean........................................................................................................ 105
Real-Time Six Sigma................................................................................................ 111
Real-Time Lean Six Sigma...................................................................................... 115
Example: Lean Six Sigma and Global Contract Manufacturing................................... 116
Chapter 9 - Dynamic Case Management.............................................................. 117
Why Do Organizations Need Dynamic Case Management?................................. 117
What is a Case?........................................................................................................ 119
Structured Flow versus Dynamic Case.................................................................. 120
Dynamic Case Management with Knowledge Workers........................................ 122
Dynamic Context...................................................................................................... 123
Dynamic Case Lifecycle........................................................................................... 124
Dynamic Case Management for all Industries...................................................... 124
Example: Taking Off with Dynamic Case Management................................................ 127
Chapter 10 - iBPM Agile Methodology................................................................. 129
Five Principles of iBPM Methodologies.................................................................. 130
Quick Wins................................................................................................................ 130
The New iBPM Paradigm........................................................................................ 132
The iBPM Platform................................................................................................... 133
Agile and Iterative..................................................................................................... 134
Build Reusable and Situational Corporate Assets................................................ 135
Example: Agile Methodology in Insurance..................................................................... 138
Chapter 11 - iBPM: The Core of Modern Enterprise Architectures..................... 139

Enterprise Architecture Models.............................................................................. 140
Business and IT Gap................................................................................................ 144
Customer and Enterprise Gap................................................................................ 144
The Modern Business Architecture........................................................................ 145
Example: Financial Institution Reduces Costs +1Billion............................................ 148
Chapter 12 - iBPM and ECM................................................................................. 149
Enterprise Content Management Lifecycle........................................................... 149
ECM and Dynamic Case Management................................................................... 150
Document Metadata................................................................................................ 151
Intelligent BPM for ECM.......................................................................................... 153
iBPM Context for Social Networks.......................................................................... 155
Example: Integrating iBPM to Manage Content End-to-End....................................... 157
Chapter 13 - Cloud iBPM...................................................................................... 159
What is Cloud Computing?...................................................................................... 160
Why Cloud Computing?........................................................................................... 161
What Type of Service?.............................................................................................. 162
iBPM and the Service Models................................................................................. 163
When to Use the Cloud: Flexibility through iBPM.................................................. 164
Example: Fast, High Volume Entertainment Delivery through the Cloud................... 167
Chapter 14 - iBPM-Enabled CRM for Customer Centricity.................................. 169
Measuring the Customer Experience..................................................................... 169
What is CRM?........................................................................................................... 170
Evolution of CRM...................................................................................................... 171
iBPM-Enabled CRM for Customer-Centric Transformation................................ 172
Optimizing the Customer Experience..................................................................... 173
iBPM Analytics and Next-Best-Action for CRM..................................................... 174
Customer-Centric Enterprise Architecture........................................................... 176
Example: iBPMEnabled CRM for Warranty................................................................. 178
Table of Contents
Chapter 15 - Pega iBPMThe Next Wave for Customer-Centric Business

Applications......................................................................................................... 179
Best of Build and Buy for Transformational, Adaptive Applications.................... 179
Pega iBPM for Customer Centricity....................................................................... 180
Business Profiler: From Business Objectives to Execution.................................. 182
Directly Capturing Business Objectives................................................................. 184
Specialize at Run-Time: Situational Execution...................................................... 186
6R Case Automation with Dynamic Case Management....................................... 188
Pega iBPM for Optimizing Customer Experiences in Adaptive Enterprises....... 195
Why Pega iBPM: The 1080 High-Definition (HD) Panorama................................. 198
References........................................................................................................... 201
Index..................................................................................................................... 205
FOREWORD
Business and IT have been on a collision course for many years because technology
traditionally has not done what the business has wanted. Because of this
conundrum, organizations have had to change the way that they think about and
approach technology in order to be successful with their projects. They have had to
become more intelligent, and so has the way in which they manage their processes.
This transition has aligned with the evolution of Business Process Management
(BPM) to what Gartner has defined as intelligent Business Process Management
(iBPM). iBPM has become THE new way of creating customer-centric software and
agile business solutions. iBPM challenges and collapses the silos that separate
business units. True iBPM empowers continuous improvement through continuously
evolving automation. iBPM has spurred new levels of cooperation and collaboration
between business and IT.
iBPM is transformational, putting customer outcomes at the heart of every process.
Businesses empowered to change business software and achieve a rhythm of
change and continuous improvement, have suddenly become reality. Business
context and the business milieu now become actionable. iBPM automates not only
mundane tasks and key business practices, but also dynamic knowledge work. This
is a topic that I address in my forthcoming book Customerpocalypse. In essence, if
todays businesses do not have the intelligence and ability to quickly adapt, they run
the chance of being the next great business failures.
As iBPM automates work, it also learns and adapts. It is a platform that handles
predetermined structured processes as well as dynamic unstructured collaboration
across teams and geographies. It is an approach that intelligently guides human
workers and makes them much more productive. It incorporates social networking
and allows interaction through familiar Web browsers or mobile devices of choice,
whenever and however desired, with client experiences seamlessly integrated
across channels.
Simply, iBPM is about running the business. Better. And ALWAYS about responding
to each customer situation with optimal business intelligence and the efficiency of
dynamic automation.
Perhaps most importantly, iBPM helps organizations innovate. While the previous
generations of BPM focused on process efficiencies, this new generation of BPM has
empowered organizations to innovate and create new models to run their businesses
and drive better outcomes.
Whether you are a novice in BPM or have been adopting BPM for improving your
processes, you will find Setrag Khoshafians insight invaluable in your BPM journey.
The book covers the fundamentals of iBPM, the role of iBPM in the enterprise
ecosystem, legacy modernization and process improvement, and culminates by
examining how Pega BPM is the modern way to build dynamic, customer-centric
business applications.
At Pega, we have been intensely focused on providing both the ideal platform for
business innovation, as well as solution frameworks to jump start solutions in
many industries.
Today, organizations need to Build for Change to achieve new levels of agility,
enhance customer loyalty, generate new business and improve productivity. Pega is
committed to driving innovation and the success of our clients in this critical mission.
Please enjoy Setrags exploration of iBPM practices and potential. We look forward
to sharing this journey with you!
Alan Trefler
Founder & CEO
Pegasystems
10
Foreword
Alan Trefler is the Founder and Chief Executive Officer of Pegasystems. He also
serves as Chairman of the Pegasystems Board of Directors.
Alan was named The American Business Awards Software CEO
of the Year for 2009. He was also named Public Company CEO
of the Year in 2011 by the Massachusetts Technology Leadership
Council. Alan has frequently presented to international audiences,
written for major publications, and consulted extensively in the use
of advanced technologies and work automation. In 2011, Alan was
a keynote presenter at the Baron Funds Conference. He has been
profiled in national print and broadcast media including CNBC, Fox Business News,
Fortune Magazine, Inc. Magazine, Forbes, The Boston Globe, The New York Times,
Bloomberg Television, Barrons, Reuters, and Investors Business Daily. Alan has also
been named the inventor of five issued US patents and several US and international
patent applications for Pegasystems distinctive Inherited Rule-Based Architecture,
which provides the framework for Pegasystems rules-based Business Process
Management (BPM) solutions.
Alans interest in computers originates from collegiate involvement in tournament
chess, where he achieved a Master rating and was co-champion of the 1975 World
Open Chess Championship. His passion and support for chess and the games
community and current champions continues to this day. Alan holds a degree with
distinction in Economics and Computer Science from Dartmouth College.
11
ABOUT THE AUTHOR

Dr. Setrag Khoshafian is one of the industrys pioneers and recognized experts in
iBPM. He has been a senior executive in the software industry for the past 25 years,
where he has invented, architected, and led the production of several enterprise
software products and solutions.
Currently, he is Pegasystems Chief Evangelist and strategic iBPM
technology thought leader involved in numerous technology,
marketing, alliance, and customer initiatives.
His interests and expertise span all aspects of iBPM in the
enterprise, including Predictive and Adaptive iBPM, Internet and
Process of Everything, Dynamic Case Management, Social iBPM,
iBPM for SOA, iBPM for Legacy Modernization and Business
Transformation, Real-Time Lean Six Sigma, iBPM Methodologies, Centers of
Excellence , and Organizational Impact of iBPM.
Previously he was the Senior VP of Technology at Savvion, a senior architect
at Ashton-Tate, and OODBMS researcher at MCC. Dr. Khoshafian has authored
ten books and numerous reviewed articles on iBPM and advanced database
management systems.
He is a frequent speaker and presenter at international workshops and conferences.
This book on iBPM is the second edition of his previous book titled: BPM: The Next
Wave for Business Applications. He is also the author of the seminal work: ServiceOriented Enterprises1 that focused on the cultural service dimension as well as the
emerging architecture of service orientation. It showed how by aligning business
and IT, business process management (BPM) has become the core layer of SOEs.
Dr. Khoshafian holds a PhD in Computer Science from the University of WisconsinMadison. He also holds an MSc in Mathematics.
Blog: http://www.pega.com/community/pega-blog/33684 iBPM
Professor: http://www.pega.com/products/bpm/bpm-professor
Available at http://www.pega.com/featured/soe
13
ACKNOWLEDGEMENTS
This book was made possible through the support, encouragement, and
contributions of many Pegasystems resources. First and foremost, I would like to
thank Alan Trefler for his vision, leadership, and the foreword for this book. It is
a privilege to contribute to Pegas market leadership in iBPM, and Alan made that
possible. I also would like to thank Leon Trefler, Pegas Senior Vice President of
Sales, for his support and encouragement. The original idea for this book came
from Leon. The content and the flow of the book follow the iBPM Professor series,
available on www.pega.com, which we started through the efforts of Eric Deitert.
Lauren St. Amand, Director Field Marketing, was the overall project manager.
Lauren did a terrific job managing and coordinating the production effort on a tight
budget and schedule. Notable mention should be made of the books project team,
especially Brendan McKennawho did a great job editing this bookand Claire
Larrabee for copy editing and proof reading. I would like to thank Brian Callahan,
Director of Public Relations, for many contributions including edits to the foreword,
provisioning the quotes and overall PR for the book. Also would like to thank Frank
Tutalo and Andy Dear for the PR and social networking promotion of the book.
I would like to thank especially Katie Rezza as well as David Marrano and Sara Fix
for the books art work and illustrations. As you can see, they did a terrific job. I also
would like to especially thank Stephen Zisk, Senior Manager Product Marketing, for
his many contributions and edits.
Throughout the past few years, I have had the privilege of engaging in constructive
thought leadership exchanges with many of my colleagues at Pega. It will be difficult
to list them all. I would like to thank Max Mayer, Pegas Senior Vice President of
Corporate Development, and Louis Blatt, Pegas Senior Vice President of Business
Unit Management, for their perceptive leadership on Pega messages and positions
reflecting various industry trends. I also especially appreciate the efforts of Product
Management, under the leadership of Kerim Akgonul and Product Development,
and Mike Pyle. Through their efforts they have made Pega the leader in iBPM and
Dynamic Case Management.
Colleagues who provided helpful support and insight for this book from the marketing
leadership team include especially Dave Donelan, Vice President Field and Partner
Marketing; Douglas Kim, Managing Director Product Marketing; Steve Kraus, Senior
Director of Product Marketing; Russell Keziere, who oversees Pega Corporate
Marketing; and especially Bridget LaBrode, Executive Assistant, for her outstanding
communication and helpfulness. Other notable mentions include Stephen Bixby,
Senior Director of Product Management, John Petronio, Director of Product Marketing,
and Ken Schwarz, Director of BPM and Case Management Product Marketing.
15
I am also grateful to the thought leadership interactions that I have had with a
number of colleagues: Rob Walker, Vice President Decision Management Analytics,
Peter van der Putten, Director Decision Solutions, and Keijzer Maarten, Senior
Director Product Management Decision Analytics on Predictive and Adaptive
Analytics as well as Adaptive Enterprises; Don Schuerman, Senior Director Solutions
Architecture, on Process of Everything; and Erik Moti, Manager Solutions Consulting,
and Sushil Kumar, Senior Director COE Architecture, on Legacy Modernization. I also
appreciated exchanges and discussions with Paul Roeck, Senior Director of BPM
Adoption Services, and his team on iBPM COE and Methodology. Other notables
include John Barone, John Everhard, and Bruce Williams.
Last, but definitely not least, I would like to thank my wife Silva, who had to put up
with yet another book project.
16
ACKNOWLEDGEMENTS
Why iBPM and not iBPM Suite or System?

This book is about intelligent Business Process Management. Technology is critical, and
Gartner (www.Gartner.com) calls the leading application infrastructures that support
BPM projects and programs Business Process Management Suites [http://www.gartner.
com/it-glossary/bpms-business-process-management-suite/). It has also been called
BPM systems.
However, BPM is much more than technology. BPM is at its core a transformational
management discipline that helps organizations achieve their strategic goals.
Automation is a key component of BPM solutions. As a discipline, BPM drives the
operations of enterprises. It includes several iterative phases from design to execution to
monitoring and continuous improvement. It plays a key role in process improvement and
enterprise architectures.
The intelligent adjective represents an important evolution and milestone in BPM.
Gartner introduced the term and acronym iBPM Suites
(http://www.gartner.com/DisplayDocument?doc_cd=224913&ref=g_sitelink).
iBPMS encapsulates a number of core capabilities, including:

Process Execution and State Management Engine

Model-Driven Composition Environment
Document and Content Interaction
User and Group Interaction
Basic Connectivity
Business Activity Monitoring (BAM) and Business Event Support
Simulation and Optimization
Business Rules Management (BRM)
Management and Administration
Process Component Registry/Repository
iBPM suites are ideal for intelligent business operations. Key among intelligent business
operations are iBPM-enabled customer relationship management operations.
So to represent the holistic end-to-end discipline of realizing strategic objectives, as well
as the increased ubiquity of the BPM suite or platform, we have used intelligent BPM
iBPMthroughout this book, with the full understanding that the iBPM Suite with all its
components and capabilities are not only covered extensively in the book, but constitute
the core of the iBPM transformational discipline.
17
CHAPTER 1
What is iBPM?
This book is about the next wave for customer-centric business applications
through intelligent Business Process Management (iBPM). What is iBPM?
iBPM is a transformational discipline that helps organizations achieve their
strategic goals. iBPM spans several iterative phases, from design to execution
to monitoring and continuous improvement. It plays a key role in process
improvement and enterprise architectures. Perhaps most importantly, iBPM helps
organizations achieve robust customer centricity by automating their policies
and procedures. The evolution of iBPM was a long journey. Intelligent Business
Process Management has evolved from advances in process improvement,
business transformation, work automation, business rules, analytics, enterprise
architecture, the Internet, and social collaboration.
The iBPM disciplines and technologies are enabling the emergence of the adaptive
enterprise. Through iBPM, an adaptive enterprise continuously aligns its business
objectives to operationalized policies and procedures with complete transparency,
visibility, and control. More importantly, an adaptive enterprise is agile and proactive
in responding to change. After all, the only constant in business is change!
Policies and Procedures

A business is a collection of policies and procedures. Now, where are these policies
and procedures derived from?
Policy & Procedure Manuals: Whether youre dealing with operations
in the front-, mid- or back-office, there are policy and procedure
manuals. Without iBPM, workers need to be trained to follow the
documented descriptions of policies and procedures, resulting in
manual, expensive, and error-prone processing.
Peoples (Knowledge Workers) Heads: Often, there are designated
experts, or knowledge workers, who have the policies and
proceduresthe business rulesin their heads. The challenge is
to harvest these policies and procedures. With iBPM, knowledge
workers can participate in the automated processes as well as
collaborative, dynamic cases.
19
Legacy Code: Another source of policies and procedures is legacy

code that contains business logic. The embedded policies are often
ossified in legacy code with little or no business visibility. They are
difficult to change or extend. The challenge is to leverage legacy
systems, while allowing the organization to modernize and be agile. It
is like changing the oil in a car while the engine is still running. iBPM
can modernize and transform incumbent legacies.
Data: Sometimes the behavior of customers is hidden in operational
databases, historic data warehouses, and increasingly in big data
that needs to be mined and operationalized. Through data mining
techniques, predictive customer behavior models can be discovered
from data. The challenge then becomes the execution or
operationalization of the discovered models. iBPM provides the
context for executing predictive decisions.
Modeling: In other situations, enterprises embark upon modeling
initiatives to capture as-is models to see how they can improve them
and create to-be models. Often, such modeling initiatives result in
voluminous documentation and modeling artifacts with little
business impact or business value.
Intelligent Business Process Management is about business
process automation: not only capturing the policies and procedures
in the iBPM system as models, but automating these models,
operationalizing them, and allowing the business to continuously
monitor and improve.
Execution Gaps
Every decade or so, a new technology trend arrives with the promise of finally
resolving the conundrum of adaptive enterprise connectivity and efficiency. There
are many solutions and technologies that are attempting to gain mindshare
for business solutions. Some of these include enabling technologies such as
social networking and the cloud. However, iBPM provides the most agile, unified,
aggregated and viable platform to build business solutions. An iBPM solution
specifically addresses the execution gaps between business objectives and the
execution of business activities.
Traditionally, IT departments attempt to keep up with business execution through
information systems. This approach has inherent limitations and has not been
able to keep up with business demands. Why the gap? Well, partly because IT
and business have different priorities. Business is, first and foremost, focused
on revenue. Business objectives are also tightly associated with market share
20
Chapter 1
and the branding of products and services. Other high-level objectives include
improvements in productivity, compliance, cost reduction, as well as innovation by a
well-oiled adaptive enterprise with satisfied customers and stakeholders. IT, on the
other hand, focuses on providing the necessary support and execution of systems
that can help achieve the business objectives, using intensely technical platforms,
tools, and primitives. There are legacy and proprietary systems that are difficult to
extend. These traditional IT issuesfrom maintenance to increased backlogs and
requirements for new applicationsare augmented with new challenges, especially
globalization and compliance.
Today, organizations are increasingly facing pressures to change and respond

to multiple types of challenges. These can come from internal stakeholders,
customers, the government, and shareholders alike. As organizations migrate to
emerging enterprise solutions, the frequency and magnitude of change is increasing.
Market pressures, the need to integrate diverse departments, and global competition
are driving management to constantly evolve the rules of the business, resulting
in a massive increase of changes in business policies and procedures. Since iBPM
solutions automate policies and procedures, they stand the best chance of reducing
or even eliminating the execution gaps, while allowing the business to keep up with
change. The next sections delve into each of the letters of the acronym: B, P, and
M as well as the i or the intelligence of iBPM.
Business: The B in iBPM

Lets talk about iBPM, starting with the business. iBPM is not just about technology:
It is the discipline of building solutions with a business focus. How?
21
Business Objectives: Businesses have objectives. These are often measurable

objectives such as Key Performance Indicators (KPIs) to grow revenue, cut costs,
or increase customer satisfaction. Through iBPM, the business can drill down
from their high-level KPIs to automated business processes, gaining complete
visibility and control.
Business Requirements: Businesses have requirements that need to be

operationalized and automated. Through iBPM, businesses can have a common
lingua franca with IT and directly realize their requirements within the iBPM tool.
Context for Business Assets: Businesses need to treat customers uniquely,
based on a particular set of criteria. iBPM can provide the context and specific
solutions for their specific customers or lines of business. Through iBPM,
enterprises can easily reuse and specialize their business assets.
Innovation and Change: Businesses need to innovate in order to compete.
They also need to be able to introduce change, and do it very quickly to respond
to market demands. Here again, iBPM is the ideal platform for innovation
in products and services. More importantly, iBPM allows organization to be
adaptive and responsive to changes in business objectives, customer behavior,
and market conditions.
So, iBPM solutions are about business process automation. iBPM enables the
business to directly capture their objectives and to manage change. This change
can happen through easy-to-use process modeling constructs such as business
rule, process, and case models. With iBPM, the business has the power to directly
introduce changes in order to meet their objectives.
22
Chapter 1
Process: The P in iBPM

BPM suites focus on the process by automating the work. iBPM suites make it easy
to receive work that needs processing. Work can be received across various channels
including a Web browser, phone, mail, mobile, web services, and others. iBPM then
routes the work to systems or people based on skill, workload, priorities, or service
levels. iBPM organizes related work into dynamic cases which can then be prioritized
and managed. iBPM also keeps track of all the activities and tasks that execute
within the various business process solutions. This is known as real-time business
activity reporting. It is extremely important for the business to coordinate and control
its objectives, and have complete visibility as to what is happening throughout
its operations. The business can drill down from these KPIs or reports and make
changes, such as reassigning tasks if certain processes are not on schedule.
The iBPM engine also does research. This means that it dynamically gets data
as needed and when needed by going to the best sources. These are often legacy
systems of record or back-end systems. iBPM solutions use predictive and
adaptive analytics to ensure that interactions are on target. It recommends the
Next-Best-Action2 in customer interactions. It responds contextually depending
upon the customer, the product, and the location, and can generate automated
correspondence. iBPM enables business solution customers, partners, or other
Next-Best-Action means real-time decisioning is applied using predictive models, adaptive
models as well as business rules to identify optimal (best) actions in iBPM solutions.
2
23
parties to collaborate. This brings us to resolving the work, which means driving
it through the processes and the associated business rules towards completion.
iBPM suites automate work as much as possible, and when human participants or
operators are involved, the iBPM suite assists them through guided interactions.
Management: The M in iBPM

How about management in iBPM? There are at least three complimentary aspects
of management:
Managing Business Performance: With the help of enterprise process
automation, the business is able to do real-time activity monitoring. iBPM
keeps track of the execution of each automated process and maintains an audit
trail of the assigned tasks, the performance of operators or workers, and the
performance of individual processes or iBPM solutions. Businesses can take
any of their KPIs and drill down to affect change. For instance, they can bulk reassign the tasks of operators who are not able to keep up with their service levels.
Managing Change: With iBPM, the organization can easily introduce business
policy or procedural changes while reusing assets across the organization.
Often, the business can be empowered to make changes directly. These assets
include process flows, decision rules, case types, constraints, expressions,
user interfaces (UI), and integration. They can be organized along a number of
dimensions such as product type, customer, or location. At run-time, the iBPM
provides contextual or situational execution of the asset at the moment when it is
needed. Through iBPM, the business can be empowered to introduce incremental
changes to business rules and processes.
24
Chapter 1
Managing Business Solutions with Agility and Continuous Improvement:

Through iBPM, businesses can prioritize as slivers the various initiatives or
projects they have for improvement or optimization. Each sliver represents
a low-hanging fruit that can demonstrate a quick improvement or win with
demonstrable business value. The business can automate business solutions
through iterative iBPM methodologies. The iBPM system can construct, wizard,
and provide accelerated assistance throughout the iterations and continuous
improvement lifecycle of the solution. The business, in collaboration with IT, can
deploy solutions very quickly, and then observe the behavior and performance
of the automated processes. It can then introduce incremental changes through
continuous improvement cycles.
The i in iBPM
What about the intelligent in iBPM? There are many reasons for the i in iBPM:
Dynamic Case Management: iBPM supports both planned, structured flows
and dynamic cases involving knowledge workers. Cases reflect how we like to
25
worksocially, collaboratively, responsivelyand can include many participants

to handle exceptions. Dynamic cases involve the organization of tasks in a case
hierarchy. Cases can respond to or generate business events.
Social iBPM: iBPM solutions leverage social tools, providers, and metaphors
in all phases of iBPM solution lifecycles. Most importantly, iBPM provides the
context for social networking and collaboration.
Mobile iBPM: iBPM allows organizations to seamlessly initiate and complete
automated case work from end-to-end via mobile devices. The instant
accessibility of case status, case work, and case collaboration via mobile
empowers a whole new category of mobile workers.
Cloud iBPM: With the cloud, you can have enterprise applications that are built
securely using the iBPM platform on the cloud: iBPM for Platform as a Service
(PaaS). Once the iBPM solution is built and deployed, it can also execute or run
on the cloud: iBPM Software as a Service (SaaS).
Business Rules in iBPM: Business rules implement business decisioning logic
and business policies, and these rules drive iBPM solutions. There are many
categories and types of business rules such as decision trees, decision tables,
constraints, and expressions. The focus on business rules is on externalizing
the business logicas close to the business as possiblewithout worrying
about execution time, execution method, or execution order. Business rules
are declarative. Predictive modeling techniques can be used to detect business
patterns and then invoke or operationalize the discovered rules in the context
of iBPM solutions.
Analytics and Adaptive iBPM for Real-Time Decisioning: One of the most
important trends in the industry is the emergence of data science and
especially big data analytics. Predictive analytics are delivering tangible
benefits to organizations by unlocking the insights hidden in vast amounts of
digital information. iBPM, through both predictive and adaptive (self-learning)
analytics, enables the insight that is discovered to become actionable. The
actions are the decisions that the participants (e.g. customer service
representatives (CSR) or marketing operators) make in robust intelligent BPM
interactions. The sources and types of data that can be mined for actionable
models in iBPM are heterogeneous and span social networks, transactional
data, data warehouses and social network stores. iBPM solutions leverage
predictive and adaptive models to provide the Next-Best-Action in various
dynamic case interactions.
Therefore iBPM solutions are dynamic, social, mobile, rules-driven, and adaptive.
These solutions can continuously analyze, learn and adapt from external events or
the behavior of constituents and participants. iBPM provides the platform, solutions,
best practices, methodologies and governance for adaptive enterprises.
26
Chapter 1
The Evolution of iBPM

There are five trends that have evolved and culminated as iBPM including: Process
Improvement, Process Automation, Process Intelligence, Process Architecture, and
Process Participants.
Process Improvement: The evolution of improvement in process efficiency
and productivity within organizations goes back to Taylorism, or Scientific
Management. In the 1990s, business process re-engineering took a top-down
approach for process improvement and reorganization. Due to the radical
amount of change attempted, most re-engineering initiatives did not succeed.
Process improvement methodologies, such as Lean and Six Sigma, attempt to
eliminate waste in work processing, while increasing the efficiency as well as
the effectiveness and quality of products or services. Theory of Constraints and
Net Promoter Scores (NPS)3 provide robust and complementary improvement
frameworks. The key point is that, whether improving NPS or critical-to-quality
measurements for a Lean Six Sigma project, iBPM allows organizations to
keep these measurements as well as control the customer experience and
operational efficiency in real time.
Net Promoter Score, Net Promoter and NPS are registered trademarks of Bain & Company,
Satmetrix Systems and Fred Reichheld.
3
27
Process Automation: Automation has also evolved from structured production

workflows into collaborative, unstructured, and dynamic cases. Production, or
structured, workflow BPM focuses on predetermined, clerical or transactional
work. Social and mobile technologies are expanding the scope of automation
empowering connectivity as well as engagement of different categories of
workersespecially knowledge workers and knowledge-assisted workers.
Cases are holistic, involving tasks organized in a case hierarchy and aggregating
information and content from many sources. They can handle unstructured and
collaborative work with social and mobile capabilities, as well as structured
production workflow. Cases are also dynamic, adding or changing any of their
elements often during the course of work, driving towards a concrete business
objective or goal. Dynamic cases respond to and generate events and can adapt
when requirements, behaviors, circumstances, or events change.
Process Intelligence: The intelligence in processes emanates from a number of
core capabilities in an iBPM system. These include a rich collection of business
rule types, predictive analytics, adaptive (learning) decisioning, event rules,
and recommendations from big data.4 Business rulessuch as constraints,
decision trees/tables, expressions, etc.are an integral part of business process
solutions. A business is a collection of policies (often implemented as business
rules) and procedures (often implemented as process flows or cases.) Often this
process intelligence is harvested from knowledge workers. Other sources include
policy manuals and legacy code. Increasingly, the intelligence is mined and
harvested from data. The sources and types of data vary and can include process
or case data, transactional data, data from data warehouses, data from social
networks, and of course the increasingly popular big data. Predictive and adaptive
analytics mine these data sources to create actionable predictive models.
Process Architecture: An enterprise architecture (EA) is the blueprint of the
enterprise, capturing business, application, information, and infrastructure
models and their relationships. An EA attempts to modernize legacy systems and
govern change through complex organizations. Service-oriented architectures
(SOA) and Web-oriented architectures (WOA) are important patterns that provide
the ability to loosely couple applications, trading partners, and organizations via
standards. Increasingly, business applications are becoming iBPM application, or
at least are modernized through an iBPM agility layer. With the emergence of the
cloud, infrastructure is being outsourced as a service. The most important trend
is to combine data, process, and intent to optimize the customer experience via a
revamped business architecture based on iBPM.
Process Participants: The last, but perhaps most important trend is the evolution
of the process participants. BPM has its roots in human participant-focused
workflow systems. The coordination in this category is human-to-human. While
some traditional BPM technologies and methods are still purely workflowfocused, iBPM is much more than that. Other significant categories of software
Wikipedia. Big Data. Last Modified July 29, 2013. http://en.wikipedia.org/wiki/Big_data
28
Chapter 1
that have influenced the evolution of iBPM include Enterprise Application

Integration (EAI) and business-to-business (B2B) integration, which enables
system-to-system and human-to-system iBPM. With Internet of Everything5 (IoE)
we now have a new category of machine-to-machine (M2M) integration. iBPM
coordinates all these participants (humans, systems, and machines/devices) in
complex, dynamic processes and cases to achieve business objectives.
Process of Everything6: The Internet of Everything (IoE) is the most important

technology trend. It will involve billions of devices or Things connected over
the Internetgenerating data, sensing, firing and consuming events, and
being controlled remotely. From cities, to innovative businesses, to intelligent
buildings, to farmlands and residences, the IoE is changing entire ecosystems.
Every day new intelligent Things are joining the IoE. The trend is starting
to generate considerable amounts of data. As more and more intelligent
Things join this ecosystem, opportunities for innovation increase. Intelligent
Things augment humans with increased automation and efficiencies, which
ultimately improve life. iBPM provides the context as well as the container for
intelligent Things to collaborate to achieve objectives. Key iBPM capabilities
such as business rules, event correlation, analytics, and especially dynamic
case management are ideal for this spectrum of participants collaborating
for continuous improvement and the optimization of objectives. In the next
couple of decades, semi or even fully automated human robots and avatars
Cisco (2013). Internet of Everything.http://www.cisco.com/web/about/ac79/innov/IoE.html

For more details see Process of Everything in iBPMS: Intelligent BPM Systems, 2013, edited
by Layna Fischer. Lighthouse Point, Florida: Future Strategies, Inc., Book Division.
5
6
29
will become increasingly pervasive. iBPM is about automation involving

different categories of participants, including intelligent Things in dynamic
cases, with Things collaborating with humans and systems to complete tasks
and drive business outcomes. Additionally, intelligent Things or software
agents7 can also assist human workers in iBPM solutions. In fact, automated
processing and the processing of dynamic casesall through the iBPM
platformprovide the best milieu to leverage and demonstrate the potential
of this new generation of intelligent workers. As this trend matures, humans
will increasingly be focusing on innovation and cognitive work, delegating the
routine and even the knowledge assistant work to automated Things. So, a
new era in process automation is on the Internet horizon. This is the Process
of Everything (PoE).
All these trends are culminating in iBPM, which has become the platform that
enables an organization to realize the promise of the adaptive enterprise. With iBPM,
stakeholders will have complete visibility and control of their objectives, which are
often expressed in their KPIs or enterprise performance measures. They can see and
understand what is going on with their support, mission-critical, or management
processes. More importantly, they can be proactive and make changes to improve.
iBPM enables business stakeholders to be in the drivers seatmonitoring,
improving, innovating through new solutions, automating process work, and building
efficiencies throughout. In other words, iBPM is about running the business with
agility, efficiency, and customer-centric effectiveness!
See Agent Technology: An Overview by James Odell, http://www.jamesodell.com/Agent_

Technology-An_Overview.pdf
7
30
Chapter 1
CHAPTER 2
Who Benefits from iBPM?
In Chapter 1, we answered the question: What is intelligent BPM? In this chapter
we will discuss who benefits from iBPM. The short answer is everyone. Everyone
includes the customer, the business, operations, and IT. This end-to-end and holistic
benefit of iBPM is extremely important. iBPM is not just for the business, though the
business reaps tremendous benefits from iBPM solutions. By the same token it is
not just for IT, though IT will be able to modernize its architecture, deliver high quality
solutions on time and gain incredible productivity. Given the very nature of business
transformation, iBPM is the only approach to cover improvement for all stakeholders.
Customers (or trading partners in B2B scenarios) benefit with consistent and high
quality services that improve and transform the customer experience. The business
gains the ability to respond to different types of market demands. Operators or
workers also benefit, whether they are a knowledge worker, a clerical worker, or
a knowledge-assisted worker, such as a customer service representative. These
workers will be empowered with efficiencies that help them to focus on their tasks.
Benefits for Customers: Transforming the Customer Experience

Every business claims to be customer-centric. However, few organizations can
achieve a true customer experience transformation. iBPM allows quantitative and
qualitative customer expectations to be directly linked to internal processes, from
the front-office to the back-office. Today, the power has shifted from product-centric
31
companies to vocal customers, empowered especially through social media

channels8. These empowered customers interact with peers and multiple channels
online and easily switch providers if their needs are not met. Net Promoter Scores9
and enterprise performance scorecards are pervasively compelling organizations
to be ever-more driven by specific measures of their performance, identifying
constraints, adapting, and acting.
There are three essential components of customer relationship management (CRM):
marketing automation, sales force automation, and customer service and support
(see Chapter 14). With iBPM-enabled CRM, there is complete visibility, transparency,
and agility of processes supporting automation in CRM. Changes or customization
to any aspect of CRM processes can easily be achieved, often by the business.
Customer experience optimizations can be readily achieved in enterprises that are
aggregated and connected via dynamic cases that involve all the processes in an
organization that can affect the promoter scores.
There is also a cultural shift. Different customers prefer to be treated differently,
depending on their context or situation. In order to meet the varying needs of todays
complex customers, companies need to offer more than an exceptional product
or service; they must provide an exceptional customer experience. Customer
experience has been commonly defined as the sum of all experiences a customer
has with a supplier of goods or services over the duration of the relationship with
that supplier. A great customer experience is also a positive emotional connection
that a customer has with a company, often resulting in a long-term relationship. This
is developed by a companys ability to answer client concerns at the right time, at
the right place, and across the appropriate channels. Companies have a significant
opportunity to differentiate themselves by providing great customer experiences
and maximizing customer lifetime value. This experience is not just about service,
with timely and high quality responses. It is also about innovation, agility in making
changes based on customer feedback, empowering the customer and truly making
them a partner. Delivering this type of experience results in complete visibility
and control for the organization, but more importantly, it allows customer service
representatives to better service the customers.
iBPM supports the customer experience transformation through a number of
essential capabilities:
Real-Time Sentiment Analysis and Processing of Social Media Postings or
Exchanges with Real-Time Improvement: Traditional customer service solutions
expect the customer to make inbound contacts directly to the enterprise. With
For a deep dive on the emerging Generation C and Generation D customers see Alan
Treflers book Customerpocalypse (2013).
9
Satmetrix Systems and Fred Reichheld.
8
32
Chapter 2
social media, it is the responsibility of the enterprise to continuously monitor

customer communications, and based on those communications adapt the
customer experience to ensure it is optimal. Social media has become a powerful
channel for customers to provide their commentary on products and services.
Customers increasingly leverage social media tools such as forums, blogs, social
networking sites, podcasts, RSS feeds, wikis, and others to express opinions
about products and services, exchange commentary, and interact. Organizations
are starting to notice the impact of this social-media driven voice of the customer
on their bottom line. Social media posting can go viral in an instant, sometimes
with devastating results, as disgruntled customers express their impressions
publicly on social networks. Through iBPM, organizations can leverage data
mining and then handle the monitored and analyzed voice of the customer using
automated processes and cases.
Holistic, Ad-hoc and Dynamic Cases to Readily Handle Customer Needs: In

addition to supporting predetermined and structured processes, organizations
need to be able to dynamically add or adjust tasks that are often introduced
through circumstances or events that result from the real-time processing
of social media postings or inbound customer interactions. Enterprises
proactively need to monitor (either through human or automated tools) and
introduce ad-hoc tasks in customer case processes. When improving the
customer experience, enterprises need to remove potential gaps that exist
between inbound customer interactions and back-office systems that are
required to resolve customer requests, disputes, or feedback. Social media
interactions, exchanges, and feedback need to be an integral part of an
umbrella case that involves both internal (to the organization) and external
(especially social media) sources. Furthermore, these cases need to be able to
handle dynamic, ad-hoc and collaborative tasks, as well as planned tasks.
Consistent Experience across Channels: In addition to the silos between frontand back-office processes, there are also silos between channels in many
organizations. The experience of the customer ends up depending on the
channel! Furthermore, the context of the interaction from one channel is lost
when it is transferred to another. With iBPM, the organization is able to provide
consistent, high quality and targeted experiences across multiple channels
including Web-based
self-service sites,
33
contact centers, mobile devices and social network sites. Dynamic case
management solutions are built once in iBPM and leveraged across all channels,
consistently.
Customer-centric, Tailored Experience for each Situation to Treat Different
Customers Differently: Enterprises are increasingly differentiating themselves
through personalized and situational or contextual treatment of customers, such
as who the customer is, the customers location or jurisdiction, or the subject
of the interaction, such as the product or service for
the transaction. In addition, decisions on customer
interactions are guided by a comprehensive view
of the customertheir history with the company,
current disposition, treatments for similar customers,
activities that happen during the interaction and
feedback gained from forums, tweets, and other
social media channels.
In the current economy, companies have a significant opportunity to differentiate
themselves by providing great customer experiences through iBPM.
Optimizing Operations: Benefits for Operators

Leveraging iBPM, organizations can become much more efficient. The various
features and capabilities of iBPM help them focus on high-value work. Specifically,
iBPM provides the following advantages to operators:
34
Chapter 2
Automated Straight-Through Processing: Traditional work processing

involves manual searches, tasks, decisions on business logic, and often paperbased approvals that require chasing paperwork between offices and copying
information. Furthermore, traditional work processing often demands toggling
between multiple legacy application screens. Through automated processes and
policies represented by business rules, iBPM solutions eliminate all this manual
activity that increases waste and errors. Furthermore, the intelligence in iBPM can
obtain and deliver information at just the right time from multiple sources.
Guided Interactions: For tasks that are assigned to operators, the iBPM suite
can actually provide the most relevant, meaningful and guided interaction for
the task at hand. Depending on the task and its context, the iBPM-managed
interaction can be very simple and intuitive for the operator. With iBPM, the
policies and procedures are automated and guide the interaction of the operator
or worker. Contrast this to the intense training and often cryptic or complex
forms operators typically must deal with to get their jobs done. For example,
as the graphics illustrate, without iBPM automation, the process to determine
eligibility for an insurance application takes 10 manual steps. With iBPM
automation, just-in-time integration, auto-generated correspondence, and
iBPM business rules, this process is reduced to only two steps that involve the
operator. More importantly, these two steps are processed much more efficiently
with the help of automated guidance. Not only has iBPM eliminated eight steps,
the remaining two are optimized!
Real-Time Process Excellence: Through iBPM, operations can readily achieve the
objectives of process excellence and process optimization. This includes getting
rid of waste (Lean) as well as keeping processes in control through avoiding
35
variance and improving quality (Six Sigma). For example, since the business rules
and the processes for managing tasks are automated, the iBPM suite can be
smart in routing the work to the best resource. Furthermore, the iBPM suite
can keep track of service levels and automatically escalate urgencies to keep the
processes under control and on time.
Next-Best-Action: Optimizing the customer experience leverages the analytical
insight that is mined from data to support decisioning for the customer.
This applies to marketing, sales automation, and perhaps most importantly
to customer service and support. The sources of the decisioning strategy
emanate from business rules that are authored by experts or knowledge
workers using predictive models created from data gathered from multiple
sources, such as publicly available data, transactional data, or historic data
and enterprise data warehouses.
Benefits for the Business

iBPM allows the business to be agile and respond rapidly to manage change in
customer and market demands. The response could be through new products,
new innovations, and optimized customer experiences. With iBPM, businesses gain
enhanced visibility, transparency, and control using the following capabilities:
Directly Capturing Business Objectives and Strategies: In traditional

development, the business starts with a mandate, and then uses
documentation-heavy tools to capture their requirements. The requirement
documents are then used or imported as artifacts with a different tool in order to
do a high-level, and then a detailed specification or business analysis. This could
result in voluminous documentation, models, or artifacts. At some point, there
36
Chapter 2
is a hand-off from business to IT. The business artifacts are then exported and
imported into other tools to do technical design. After that, they are exported and
imported into yet another tool for coding. With the code, there are continuous
reviews and changes. Soon enough, the implementation is completely isolated
from the original business requirements. There is no roundtrip, and changes
have to go through many tools and phases of export and import. Now, that
doesnt inspire agility! This export and import process, and the involvement of so
many tools, is the antithesis of managing change with agility.
With iBPM, you are able to directly capture business objectives and
measurable business strategies. These are then readily linked to and realized
in initiatives that deliver solutions for the business requirements with zero
coding. To put it in more simple and direct terms: What the business wants
to achieve, it can do with minimal loss of meaning, time, or effort in endless
translations and mappings between teams and tools. Or in other words, real
and practical agility. This ability to directly capture objectives in the iBPM
suite is enabled by a rich collection of tools, wizards, and capabilities that tie
business goals, use cases, and requirements to actual implementation.
Instead of coding, easy to understand forms are used by business and IT,
which supports model-driven development.
Measuring Strategies and Monitoring Business Activities: Most enterprises

agree that providing solutions and approaches for achieving corporate
objectives is important. Yet, in many situations, these measurable strategies
fail to be achieved or executed. Dashboards are not enoughyou also need
to be able to drill down from top-level management objectives to specific
processes, organizations, and even individual workers to affect change. In
37
addition, the quantitative monitoring and correction of the business objectives

need to be proactive and in real time. Otherwise, performance results lag
without a clear link to the executing processes. The more easily you can drill
down from management performance to specific executing processes, the
better chance there is of aligning business with IT.
As the processes are executed, iBPM keeps track of what you are doing when you
are starting a new process instance or a case, and when you are routing work
from one participant or operator to another. The system is able to monitor these
kinds of activities from various perspectives, whether they are at the application,
solution, process, case, operator, or department level. The business is able to
monitor all the events and activities that are going on to detect if the process is
under control. It makes sure the solution is on par with business objectives. If
there are any problems, the iBPM solution will enable businesses to drill down
and solve their bottlenecks, all in real time.
Owning the Change: In some organizations, the business is able to own business
policies and procedures and make the changes directly, with little to no IT
involvement. Business policies, such as when to provide discounts, when to write
off a claim, or what constitutes an unacceptable risk, are presented to business
users in easy-to-use forms. Similar to desktop applications (such as Microsoft
Word , Excel, or PowerPoint), the business can readily make changes to
these business rules. If needed, IT could approve the changes to make sure that
they do not adversely impact other rules or solutions. The key point here is the
empowerment of business users to make changes to the solution directly and
own the change.
Providing a Foundation for Business Transformation: Transformation has many
dimensionsinnovation, empowering the business to own the change, centers
of excellence, globalization, efficiency, and effectiveness to foster great customer
experiencesto name a few. The iBPM platform and agile methodologies are
transformational because they enable enterprises to rethink and transform all
aspects of the business. As the enterprise matures in deploying iBPM solutions,
it will be able to achieve a rhythm of change that can keep up with customer
expectations, market demands and changing regulations as well as foster
cultural changes and innovation. Additionally, iBPM provides the foundation
for legacy modernization, by wrapping and renewing home-grown legacy or
enterprise resource planning (ERP) point solutions, so that they can be leveraged
in agile and transformational intelligent processes and solutions.
Productivity Gains and Other Benefits for IT

Through iBPM, IT can now achieve tremendous productivity gains. If we look at the
60-plus year history of computing, when we went from assembly languages to highlevel structured programming languages, such as COBOL, C, PL/I, and so on, we
saw enormous productivity gains. Productivity was improved five times to an order
38
Chapter 2
of magnitude. When we went from high-level structured programming languages to

object-oriented programming languages, such as Simula, Smalltalk, and later C++,
Java and C#, we also experienced some productivity gains.
However, when Pegasystems looked for independent studies that evaluated the
effectiveness of going from object-oriented programming languages to iBPM as the
platform to develop robust applications and solutions, we couldnt find any. So, we
commissioned one10. We sponsored an objective study, comparing the results for
the same business scenario implemented using a state-of-the-art object-oriented
programming language and platform and using iBPM. The results were spectacular:
Five to seven times more productivity gains using the iBPM suite than the objectoriented programming language. Thus, instead of being a challenge or impediment
to IT, iBPM suites actually help IT become more productive and successful.
There are additional benefits to IT:

Unified Platform for Processes, Cases, Rules, and Decisions: Dealing with one
unified platform and solution with a single, easy-to-use and consistent interface
for building solutions is a tremendous benefit for IT. The importance of this
cannot be overstated. Traditionally, business rules and process management
have not been unified into one core iBPM platform that can be used by both
business users and IT. Usually, rules and processes are kept separate. Trying to
align business and IT by creating artificial boundaries and roles to fit multiple
products is not a great recipe for success.
You can find the white paper of the productivity study, Capgemini Pega BPM vs Eclipse Java
IDE, at http://www.pega.com/resources/capgemini-pega-bpm-vs-eclipse-java-ide
10
39
Logically, rules and processes should be modeled and executed within the same
system. It makes much better sense to think about, analyze, abstract, and model
the declarative rules in conjunction with the information model, the organization
model, the workflows, and the user interactions. The appropriate use of business
rules changes the topology of a process flow. It also simplifies the flow and
facilitates the management of applications. Situational policies can also be used
to define when one should use a particular flow, a particular business rule, a
trading partner, or a back-end application. The policies are applied in many
situations, both within processes and across applications. Business and IT need
a common, consistent language for processes and business rules. This can
only happen if the two are unified within one complete iBPM platform. The very
essence of iBPM is to have one unified platform with the same metadata and core
engine, and a single point for maintenance and revisions.
Enterprise iBPM Repository: Directly related to the benefits of a unified
platform is the value of a unified repository. With the unified and cohesive
iBPM platform, IT is able to achieve tremendous productivity leveraging the
dynamic, multi-dimensional repository of the iBPM system. This is a single
repository that maintains all of the processes, case types, business rules,
decisions, UI, and integration. It thus becomes the foundation for change
and reuse. In collaboration with the business, IT can create new solutions by
easily customizing and extending the reusable assets, while adding layers
of specialization for specific customers, geographical locations, new lines of
business, or new functions, for example.
Successful SOA through iBPM: The road to success for service-oriented
architecture (SOA) initiatives runs through iBPM. There are many reasons
for this. iBPM allows IT to focus and prioritize the services that need to support
business solutions with real business value. iBPM methodologies also help
IT to think big while starting small. iBPM is both a service consumer as well
as service producer. It can create composite applications and publish them
as services. There is a division of labor between higher level iBPM functions
and features and lower-level SOA infrastructure capabilities, especially
the enterprise service bus. Lower-level SOA plumbing technologies can
be leveraged for brokering service calls. The business focus for SOA, while
leveraging underlying plumbing technologies, is critical. Business and IT must
align themselves around iBPM solutions that have business objectives, inherent
business object models and the associated processes, business rules, usage
models, and integration necessary to achieve concrete results while leveraging
various infrastructure technologies like SOA. This approach allows organizations
to deploy best-practice processes and rules in weeksrather than monthsand
build the process improvement momentum.
40
Chapter 2
iBPM for the Enterprise

To wrap up, if we look at iBPM in the enterprise ecosystem, the business will have
business objectives and measurable strategies to achieve. iBPM is both the source
and the monitor of these objectives, able to observe them continuously and in real
time. Often the business strategies are expressed through Key Performance
Indicators (KPIs), following strategic methodologies such as the balanced scorecard
or NPS. Some KPIs need to be optimized and handled through a continuous
improvement methodology like Lean or Six Sigma. Empowered with iBPM, the
business can continuously examine its activities, effect immediate change, and try to
optimize its strategies to achieve the business objectives. The key point is that whether
you are optimizing certain aspects of your critical-to-quality measures, or you are
trying to improve the performance of your KPIs, the foundation is iBPM. iBPM is the
transformational platform that helps organizations keep processes in control, innovate
with new solutions, and continuously improve in real time.
41
Example: Insurance Organization Delivers Staggering Global

Results
Vision: One of the leading property-casualty and general insurance organizations has
been an innovator in leveraging advanced iBPM technology throughout the enterprise
for the last decade. The companys management
team decided that a new comprehensive approach
to claims management was needed worldwide.
The existing methods were not producing
consistent results for the enterprise or the
customer. Many challenges needed to be overcome
to deliver on the vast promise of a single claims
management approach that would span the
companys global operations.
Solution: The insurance organization launched a major initiative to capitalize on its vision
and to fully leverage the organizations global reach. The company used iBPM to deliver
a single worldwide platform that would allow them to institutionalize 90 years of claims
management experience. iBPMs scalable architecture, combined with a strong governance
model, provided the right platform to help the project succeed. The company leveraged
iBPMs rules-based technology to create a configurable, claims-process core that is
designed to be reused across the global enterprise. This inherent flexibility has proven to be
the strength of the deployment.
Results: Business results confirm the competitive benefits of the global claims solution.
Claims handling cycle times have been reduced by 30% and adjusters can now expedite
claims to the right resource, right time to deliver the optimal claim outcome. A 10 point
reduction in combined ratio for individual lines of business has been achieved, along with a
substantial reduction in expenses associated with global claim leakage. Robust claims case
management automates processes designed to mitigate loss potential, delivering a 5+%
reduction in indemnity expense. Furthermore, enhancements in adjudication accuracy have
delivered a much higher return on investment (ROI) than originally forecasted.
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Chapter 2
CHAPTER 3
How Can You Succeed With Intelligent BPM?
In this chapter, we examine how enterpriseshow youcan succeed with iBPM. As

the diagram illustrates, there are a number of components for achieving success
with an iBPM. The iBPM technology and platform are necessary for success, but they
alone are not sufficient. Like any other technology, it needs to be understood and
applied systematically to achieve success. Unlike other technologies, iBPM has a
robust organizational impact. It changes to the core how enterprises build and deploy
solutions. This change can come incrementally, starting with one iBPM project,
and then radiate to others. Human nature and, by proxy, traditional organizational
behavior, resists change. However, by thinking big and starting small, with
demonstrable results, organizations can greatly enhance their chances of success.
The essential elements of iBPM improvement must be carefully followed to
guarantee success and ensure a positive transformational effect on the organization.
iBPM is becoming a means to finally narrow the execution gaps that develop when
change management objectives outpace the implementation by IT, which can damage
43
profitability and customer satisfaction. Take a scenario common to almost every

large organization. You have an offsite meeting where the executive team lists its
organizational objectives and goals. These are used to create budgets and plans for
line-of-business managers and IT to execute. Executives expect these organizations
to implement the objectives with zeal and excitement. Typically, after a few months,
it becomes evident that realizing the corporate objectives will be difficult. Due to
changing market conditions and customer expectations, organizations are finding it
hard to stay on course with their original plans and objectives.
Organizations need to deal with exceptions and uncertainty on a daily basis. They
need to respond quickly to change, and change is coming faster than ever. This
is where iBPM can come to the rescue. More than any other platform or tool, we
constantly hear of tangible results achieved through iBPM deployments. Why? As
we saw in Chapter 1, iBPM focuses on the business and helps the organization
eliminate the execution gaps, promoting productivity and customer-centricity
throughout the enterprise.
There are three key elements to successfully using iBPM in your organization:
A focus on the business objectives
A continuous improvement methodology
Commitment to a Center of Excellence
Focusing on Business Objectives
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Business users have the best knowledge of their business processes and business
rules. If you want your IT department to effectively communicate with business,
you need them to build iBPM applications that directly reflect the business owners
understanding of the desired business policies and procedures. The overall cycle can
be described as follows:
Strategize and Succeed: Business objectives provide the overall directive of the
enterprise, such as penetrating specific markets or improving social marketing.
Strategies support these overall business objectives. Typically, there will be
specific KPIs to measure the success of the chosen strategic initiatives.
The objectives and the strategies focus on the What. The iBPM improvement
technologies and initiatives operationalize
the improvements and focus on the How.
So what is being executed for
improvement? The process flows, the
dynamic cases, and the accompanying
business rules and decisions. With iBPM,
the business objectives, the strategies,
as well as the various execution initiatives
are all captured in one unified platform. The success, measured in profit, ROI,
increased customer satisfaction and other measures, should be immediately
visible. This is important: IT and business owners should agree on what would
constitute an improvement through the elimination of manual tasks and
automation of business rules.
Model and Execute: Business users should be able to easily design processes
and author the rules that are associated with decision steps, service level
agreements, or constraints within the processes. iBPM is a model-driven
development platform which simply means what you model is what you execute,
versus simply generating modeling artifacts or documentation. As noted in the
previous chapter, the import/export of models between various tools should be
avoided. One of the keys to creating business-focused solutions and enabling
continuous improvement is to make sure all types of authors who are creating
business rules are using the same environment and platform, whether they are
business stakeholders, analysts, or IT developers. This should be accompanied
by an ability to roll changes back in case there are problems. In other words,
versioning and configuration management should be built in with modeling and
design. Using this approach, iBPM brings IT and business together to collaborate
and rapidly deploy iBPM applications via incremental and iterative changes.
Monitor and Analyze: As soon as iBPM applications are deployed, they can be
monitored. Business measures can be viewed and analyzed through a pull
of real-time, or historical and analytical reports. iBPM stakeholders can author
rules that determine what to watch for and what actions to take if there are
potential bottlenecks. Through real-time monitoring of activities, the business
gains complete visibility and control of automated processes, enabling business
45
owners to drill down and affect change in real time. As we shall see in the next
chapter, analysis can be further improved as iBPM is able to learn from
historical data and operationalize predictive models as well as continuously
learn and adapt through adaptive models.
Innovate and Experiment: Through innovation, organizations can create new
services and products that help their customers, partners, and of course,
the organizations bottom line. In fact, given the pace of change, innovation
becomes essential for survival. iBPM is critical to helping organizations
quickly invent because it allows new applications or changes to existing
applications to be piloted and experimented with before they are put into
production. Piloting allows the organization to analyze any potential issues in
the overall implementation of the processes. For instance, the solution could
be deployed on a smaller scale with fewer people. After experimentation,
enhancements could be introduced for mass deployment. Sometimes, the
experimentation can involve simulation which is statistical and data-based,
or a simulation of technical integration components that could be built
subsequently. Real-world experiential feedback is essential to the success
of any project. Once ratified, the pilot can then be immediately rolled out for
deployment on a larger scale.
Continuous Improvement Methodology

iBPM agile methodology is the most important
requirement for success and continuous
improvement11. Because continuous
improvement is the essence and core of the
iBPM methodology, the best way to reap the
benefits of iBPM is to operate in the context
of the continuous improvement lifecycle. This
means constantly monitoring, piloting, quickly
deploying, and profiting. It also means eliminating bottlenecks through the design
and deployment of iBPM applications. A continuous improvement methodology
specifies the roles, phases, project management, and iterations of solutions.
Center of Excellence
As iBPM becomes more and more pervasive,
it is imperative for both large and midsized enterprises to establish an iBPM
Center of Excellence (COE) that focuses on
We will discuss this in greater depth in Chapter 10.
11
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Chapter 3
the deployment of successful iBPM projects.12 (COEs are also called Centers of
Competency (COC) or Competency Centers (CC)). The COE has many functions:
The iterative COE methodology identifies the participants, artifacts, and phases of
iBPM projects.
COE governance of iBPM projects identifies the policies for roles, standards,
decision making, and deliverables.
The COE also attempts to provide the guidelines and models for building reusable
corporate assets captured in process and policy models, supervise iBPM
methodology execution, and enable the staff involved in the iBPM projects.
An iterative, iBPM-enabled methodology is a crucial part of the overall transformational

roadmap with iBPM and will be discussed in detail in Chapter 10. Establishing and governing
the methodology lays the foundation for the iBPM COE.
12
47
Typically, the enterprise will have a corporate level COE, which will work closely with
multiple line-of-business (LOB) COEs and their iBPM project teams. At the corporate
or enterprise level, the COE governs enterprise standards as well as focuses on
integration and infrastructure standards. The LOB COEs focus on business standards
and best practices. In the iBPM journey, an organization will often start with an LOB
project, and it is highly recommended to launch a LOB COE as soon as possible. Over
time, the LOB COE can grow to a corporate iBPM COE and eventually a federated
iBPM COE, especially in large and global organizations.
The iBPM COE promotes best practices for continuous improvement lifecycles
through an iBPM maturity model, which is a roadmap that helps evolve the COE
guidelines through iBPM engineering, adoption, and governance.
COE Governance
No initiative can succeed without governance. There are five major categories of
governance in robust iBPM COEs.
1. Reuse and Customization of the Enterprise Repository of Corporate Assets:
The corporate asset policies deal with the enterprise repository governance.
Process solutions involving information, flow, business rules, case types,
integration, predictive models, and user interfaces can be reused within and
across functional units. The COE needs to establish the structure for creating
reusable assets. iBPM assets can be reused at both the corporate and LOB COE
levels, and typically there will be considerable sharing and customization of
assets across LOB COEs.
2. Enablement: Promotion, Training, and Certification of iBPM Development
Talent: The COE oversees staffing, enablement, and training policies that
govern the required competencies, experience, and certifications of the team
implementing and maintaining the iBPM solution.
3. Project Management: Project management policies are perhaps the best
understood, focusing on iterations, schedules, resources, and cost governance.
The project managers deploy and govern agile methodologies for continuous
improvement.
4. Modern Business Architecture: This includes business performance
management, analytics, master data governance, the technical service-oriented
architecture, and the overall cloud deployment strategies.
5. Enterprise Digitization Governance: Digitization of the enterprise is a significant
trend that is transforming businesses. Digitization technologies include cloud
computing, social networking, mobile devices, and analytics. Digitization needs
governance and a strategic roadmap within the context of iBPM solutions.
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Succeeding with iBPM

So, how do you succeed with iBPM? First, by aligning business and IT to speak
the same language of modeled and automated policies and procedures. Chapter
2 discussed key values of iBPM that benefit both business and ITmeasurable
strategies, unified policies and procedures, extensible solution frameworks, and
accessible platforms. Leveraging these capabilities, business and IT can speak the
same language of policies and procedures using different types of business rules
such as decisioning, constraints, expressions, event correlation rules, and service
levels. iBPM also enables business processes, information and organization models
to be communicated, developed, and deployed with zero codingall of which helps
business and IT understand each other.
Second, you can achieve a rhythm of change through continuous improvement.

Business focuses on performance objectives such as increased revenue, additional
market share, new markets, cost savings, innovation, and compliance. IT focuses on
reliable infrastructure. iBPM is the platform that handles top-down business objectives
to generate increased business value, while leveraging the underlying infrastructure,
which facilitates rapid change and a continuous improvement cycle. KPIs are realized
through automated policies and procedures in iBPM. Both real-time business activity
monitoring and historic data warehouses are used to compare benchmarks of KPIs and
potentially introduce changes to policies and procedures.
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Third, governing projects with an iBPM COE and a methodology that is iterative
and agile promotes best practices, sharing and reuse, and clear rules, policies,
procedures, and roadmaps that lead to successful implementations.
Pitfalls That Prevent iBPM Success

iBPM projects can fail. Even with the best of intentions, maturing iBPM COEs,
and robust iBPM methodologies, there are pitfalls that can prohibit large-scale,
transformational deployment of iBPM. This section summarizes the seven common
pitfalls that prevent iBPM success:
Not Securing Executive-Level Support: iBPM is transformational and often
involves and effects mission-critical solutions with human participants. Because
it can be a real game changer that empowers workers, organizations need to
involve an executive business sponsor from the very beginning of the project.
Without executive support, the project is likely to fail.
Selecting the Wrong Projects: Many business process initiatives fail because
the team takes on a project that is very important to the business, but is too
complex or risky, or does not leverage the strengths of iBPM technology. Worse,
it could be a combination of both. So, finding a balance between complexity, risk,
and business value is essential for success.
Neglecting to Form a Sustainable iBPM Team: This relates to the roles in the
LOB or corporate iBPM COE. Simply acquiring some iBPM training and then
going forth with an iBPM project is a recipe for disaster. Companies fail at
revamping their business process practices because a robust and enabled iBPM
team is not put in place.
Analysis Paralysis: iBPM is about business process automation. iBPM solutions
can achieve quick wins and immediate operational results that either generate
new revenue or cut costs, or both. Companies often get mesmerized by what-if
simulation models, and spend weeks analyzing the perfect models. Companies
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Chapter 3
often miss market opportunities that are offered by an agile iBPM development
approach with tangible results and immediate customer benefits because they
become too focused on creating the perfect modeling artifacts.
Ripping and Replacing Legacy Applications and Technology: Organizations
need to view modernization as a journey, with incremental steps towards full
deployment of iBPM solutions for all mission-critical and support processes.
While in some cases, it might make sense for a company with a huge IT wallet
and vast resources to embark on a new technological journey, these companies
often sink countless dollars and resources into ripping and replacing an entire
system in big bang projects. For iBPM, the mantra should always be Think big,
but start small. It is far better is to incrementally wrap, modernize, and renew
legacy systems for tangible and incremental results.
Failure to Own the Change: As noted above, iBPM is about continuous
improvement. The own the change value proposition involves both business and
IT. For success, the business should be intimately involved in owning the change.
The COE guidelines should provide the best practices, knowledge transfer,
expertise, experience, guidance, and reusable assets to improve the success of
project teams and of the enterprise.
Fear of Transformation: iBPM could be the most important catalyst for
transforming the organizationbut keep in mind that human nature resists
change. During the industrial revolution, many workers lost their jobs due
to automation. iBPM is currently transforming the white collar service industry,
and some jobs will be lost, while others will be significantly changed. Not every
organization is ready to place all their bets on iBPM, so it is wise to implement
iBPM maturity levels incrementally. While enterprise transformation as a concept
seems overwhelming, it becomes obtainable when it is broken into tangible and
successful phases over time.
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Example: Center of Excellence in Financial Services

Vision: One of the largest financial service companies in the United States established
a Center of Excellence (CoE) to accelerate iBPM implementations and maturity. The
goal was to eliminate development silos and improve the quality of project design and
implementation. The functions of the CoE team include bridging the gaps between IT
and business; integrating process reengineering and continuous improvement into iBPM
projects; centralizing and reusing application code and assets; creating and maintaining
architectural standards; and promoting standard methodologies, tools and education.
Solution: Housed within the central technology and operations organization, the CoE
interacts with every line of business (LOB), providing consulting services internally. With a
focus on process and governance, the CoE works closely with the LOBs business and
technical staff to help them make sure each project is a good fit
for iBPM, develop a sound business case and ROI, determine
where process re-engineering is desirable, and ensure the team
has the right training.
One of the key initiatives for the CoE was to build a foundation
of reusable assets that includes a downloadable component of
code for class structures, rule sets and other application assets,
such as interfaces to legacy systems. As the CoE matures, it
will continue to strengthen design, code, and pre-flight reviews
as well as develop better ways to measure how well a project
delivers on the expected goals.
Results: Because of the reusable assets foundation created by the CoE, the company has
saved hundreds of initial build hours. The focus on design and build governance through
the pre-flight reviews has significantly increased guardrail compliance, making applications
easier to maintain and eliminating performance issues. In addition, with project participants
properly trained, standardization, and use of an agile, iterative project methodology, golive time for projects has been reduced by weeks. And hundreds of maintenance hours
have been saved by using specialized CoE development resources to conduct quarterly
enterprise system analysis and asset updates.
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CHAPTER 4
Business Rules and Analytics for the i
in iBPM
At this point, it should be obvious that iBPM is strategic as it forms the core of the
modern enterprise business architecture. In this chapter we focus on the most
important aspects of the i in iBPM. In
addition to intelligence, the i also stands for
intentwhat the iBPM solution or a party
and participant in a case, process or task is
trying to achieve. In other words, what is the
objective of the action? The intelligence
understood about the situation needs to be
analyzed, captured, and then operationalized
in decisions to achieve the intent.
Business Rules
As noted in Chapter 1, there are many sources of policies within organizations. These
sources include policy and procedure manuals, the heads of subject matter experts
or knowledge workers, and data sources. All of these policies and procedures contain
business rules. Business rules have many definitions and connotations, but, essentially
business rules are policies, constraints, or practices and business guidance that need
to be followed. Business rules are ubiquitousthe business declares the rules and
expects them to be followed. Here are some examples of business rules:
Example 1: Categorizing Risk
-- IF Current Balance is < $500 AND Customer has a good credit THEN
Low Risk
Example 2: Expression
-- The Tax calculation is a function of the state, amount, and product type
Example 3: Constraint
-- The amount of vacation requested should be always less or equal to the
amount accrued
Example 4: Event Correlation
-- If Shipment arrived AND PO has been approved THEN send delivery notice
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Business rules are declarative. What does that mean? With declarative thinking,
your focus is on declaring your intention, not the implementation details of the rule.
Declarative means independent from the time, method, or order of execution. The
focus is on the business logic. As noted above, in most businesses, business rules
are enacted through various documents, and these can even be company memos
sent to announce new policies or changes to existing policies. For example, a
memo states that from now on all customer complaint correspondence needs to be
forwarded to a complaint task force; or that starting 10/1/2014 any type of purchase
exceeding $5,000 needs two levels of approval. These are examples of business rule
declarations. No matter how or where they are implemented, the rules must be
followed and executed.
Business rules can be associated with a process or shared across processes. There
are many types of rules that can be used in conjunction with processes. Some
of these declarative rules could apply to the process as a whole. For example, you
can have a rule action (e.g. escalate or inform owner) for implementing service
level agreements (SLAs) and associated with the entire case. Other rules could be
associated with specific activities, such as the decision as to who should be assigned
a task at a particular step.
Within the topology of the process there will be decision points, typically represented
with a diamond shape. Behind this diamond shape you can have decision trees or
tables which are evaluated, and the result of this evaluation then helps select one (or
more) of the branches emanating from the diamond shape.
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For example, a business rule which is a decision tree can drive the decision of writing
off a disputed credit card claim. The purpose of the rule is to decide whether to write
off the claim (Yes) or not (No). It uses three conditions:
The amount of the dispute
The potential fraudulence (which could depend on other rules), and
The history of the customer (has not disputed more than two in a year).
This example also includes the circumstance or the situation of rules. This
particular decision tree rule is applied when the type of credit card product is World
and the category of the customer is Gold. The rule is applied only in this context.
There will be many other rules with the same purpose (Write off?) but for different
situations or circumstances, spanning different types of products or customers. For
instance, all the other constraints being the same, for Silver customers, the rule might
write off disputes less than $25 and not the $51 for Gold customers. In the iBPM
solution, all the assetsincluding decision rulesare organized along a number of
dimensions (type of product or service, category of customer, geographical location,
etc.), and then iBPM applies the most appropriate rule based on the situation or
context of the process execution.
Business Insight from Business Data for Business Decisions
The i in iBPM also stands for insight that is obtained (or mined) from data. Data can
be historic or real time (transactional). It can be structured, as in relational tables,
or unstructured, as in text. Data can come from a single application or a single
55
source, or it can come from multiple applications or sources. Data can be private or
public. It can be from any enterprise solutions that generate data such as customer
interactions, service provisioning, support processes, or just about any function in the
organization. Today, enterprises generate hundreds of exabytes13 of content annually.
There is also the potential large insight from big data to make recommendations
based on the behavior of customers. Big data is characterized by large volume and
variety and changes with increasing velocity. The question is: Are we gaining insight
or knowledge from the data that we are constantly generating? More importantly,
are we operationalizing this insight in business processes?
In the illustration, as you go right on the X-axis, you have better and better insight or
knowledge discovery. On the Y-axis, as you go up, you have better and better business
value. As illustrated here, there are a number of analytical techniques and tools that are
associated with business intelligence (BI). These cover various capabilities, or aspects
of insight or knowledge discovery, and business value. At the bottom left, you have
business activity monitoring (BAM) reports or historic reports. Then, you have online
analytical processing (OLAP). With more business value and insight, you have KPIs and
scorecards. At the top right, you have data mining and operationalized predictive as
well as adaptive models. This operationalization is achieved through intelligent BPM.
Enterprise Performance Management

This brings us back to B, the business in iBPM that we touched upon in Chapter 1.
There are many dimensions and aspects of the B in iBPM. One of these aspects is
reflected in business objectives or KPIs as we examined in Chapter 2, such as gaining
additional market share, increasing revenue, decreasing risk or cost, with specific and
measurable results.
An exabyte is a billion gigabytes.
13
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Some of these KPIs could undergo continuous improvement methodology cycles,

such as Lean and Six Sigma. Lean focuses on reducing waste and increasing process
efficiency. Six Sigma focuses on reducing variance and improving the quality of the
processes. Now, the KPIs that are measured and improved through a continuous
improvement methodology could correspond to properties that pertain to an iBPM
solution or application. That is, the Lean and Six Sigma continuous improvement
methodologies are improving efficiencies of processes that are automated through
iBPM. Such continuous improvement or Lean Six Sigma initiatives become iBPM
projects14. The process will be kept under control in real time.
The business objectives can also be monitored and controlled through an enterprise
performance management dashboard. Here, you might be dealing with data
warehouses or historic data, where iBPM solutions are one of the sources that are
providing information to the warehouse. In addition, iBPM provides out-of-the-box,
real-time business activity monitoring that allows stakeholders to act on potential
bottlenecks in real time. Whether you are dealing with real-time reports, historic
data, or you have a continuous improvement methodology, the point is that all of
these measures emanate from properties, or the performance of solutions that are
automated and deployed through the iBPM.
Contextual and Situational Intelligence

When business applications execute, there is always a context or business
intentthe type of the customer, the location or jurisdiction of the customer, or the
specific business productto name a few. All these dimensions need to be used
to select and provide the best policy, user interaction, or information source for a
given situation. Through robust iBPM solutions, the adaptive enterprise needs to
reflect the way people manage change in their organization. Businesses need to
treat customers uniquely, based on a particular set of criteria. iBPM can provide the
context and specific solutions for their specific customers or lines of business. The
iBPM platformespecially its enterprise repository of business rules and processes,
dynamic case types, decisions, UI, and integrationneeds to support optimized
reuse and specialization, and then the automatic selection of the most appropriate
specialized asset (policy or procedure) for the given situation.
Using iBPM, enterprises should be able to adapt by easily reusing and globally
specializing their business assets. The assets are iBPM assets for execution
including flow fragments, business rules of different types (decision, constraint,
expression), UI, information, integration, etc. The multi-dimensional organization of
iBPM assets is the mechanism that enables the enterprise to adapt easily to:
Real-Time Lean Six Sigma is covered in Chapter 8.
14
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Introduce changes as deltas that capture specific policy or

procedure changes.
Customize and specialize so that, for instance, different customers are
treated differently, depending upon who they are, where they are, what type
of product/service they are requesting, when the request is made, etc.
Organize solutions for optimal reuse across the enterprise and then
specialize for specific locations, customer categories, solution frameworks,
or lines of businesses.
Think of giving special discounts for specific types of customers. The discount
calculation is a specialization and it depends upon the type of the customer. It could
also depend upon specific jurisdictions, locations or timeframe. That is how business
manages specializations and that is exactly how an iBPM should manage change.
Predictive iBPM
While many business processes are about doing things the right way, there is not
always the same emphasis on doing the right things. Referring to a popular theme in
this day and age, there may be a near-optimal process in place to fulfill a mortgage
application, but should the mortgage have been approved in the first place? Whats
the probability of default, and what is the expected loss to the company? Similarly,
all the sales fulfillment processes may be running full throttle, but are the right
products being offeredthose that, in the end, maximize the lifetime value of that
customer? Should a different product have been proposed, at a different price, or
with a different incentive?
This is where predictive analytics comes into play. Businesses have many hidden
treasures in their data. The data can be held in operational databases, data
warehouses or even census or publicly available data. There is value in the individual
data sources, but even more so in their combination. Customer purchase patterns,
satisfaction drivers, and future behavior are all hidden in this data. The whole
purpose of, and motivation for, predictive analytics is to discover these patterns
(predictive models), use them to predict future behavior, and then act on the insight.
Prediction is ubiquitous. Almost every business flow or business rule has some
element of prediction in it. Most of the time, requirements arise from intuition,
history, experience, or ad-hoc mechanisms to capture policies and procedures.
Sometimes the original reasons for enacting these policies have long been obsolete.
In contrast, predictive modeling is a scientific discipline within data mining that uses
measurable predictors to predict the behavior of customers. These predictors can
be an ordinal or numerical value that can be predicted from other variable values.
Historical data is analyzed and modeled to predict future behavior. Examples of
predictors include purchasing preferences, geographical location, age, income, and
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properties pertaining to the history of activities. Predictive models can be discovered

from either operational data or data warehouses. Per the mortgage example,
without predictive insight many decisions will be bad decisions. Its surprising how
many bad decisions are made based on hope, gut feel, mere assumptions, or a
nave interpretation of historic trends. Where customers, who are notably fickle,
are concerned, its almost always impossible to play by ear. Advances in statistical
analysis and machine learning have made it possible in many cases to predict
customer behavior with a high level of accuracy. Moreover, it is possible to calculate
the confidence one can have in those predictions. Theres no more guess work in
trying to figure out the right thing to do. And for every possible action, youll know the
margin of error in advance.
So the main philosophy of predictive iBPM is to aggregate and mine historic

operational data (and sometimes publicly available data) in order to make predictions
about behaviors, and then use these predictions within operations automated
through iBPM solutions.
Adaptive iBPM
Companies that have automated decisions as part of their iBPM solution can, in
some circumstances, opt for a system of continuous learning and adaptation within
the system itself. Any organization that is responsibly using static predictive models
will want to ensure that those models are continuously monitored. They need to
know when the historic data used for modeling is no longer representative of current
circumstances. In that case, the model will get tired and needs to be replaced by a
new model based on more recent data. With traditional predictive analytics, once the
predictive model has been inferred from the data, it will not change anymore. The
model is derived from a snapshot of the data and immutable afterwards. There are
many circumstances where this is acceptable and some where it is even desirable.
An altogether different approach is using so-called adaptive (or self-learning)
models. Instead of looking at a snapshot of data, this model looks at a moving
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window of data as it enters the adaptive system. Such adaptable predictive15 models
are always up to date and never get tired. If the quality (i.e. predictive power) of
adaptive predictive models versus static predictive models is comparable, it would
seem that adaptive models are the better option. Adaptive and self-learning analytics
can be leveraged to automatically adjust, for example, to market and customer
dynamics depending on what is happening with the markets or the customers. The
illustration shows the benefits of predictive and adaptive iBPM.
A popular use is where iBPM solutions are used in the CRM or marketing space, and
the decision strategy adapts to changes in customer behavior or market dynamics.
Customer behavior can change because of demographic trends, legislation, interest
rates, or a myriad of other factors. Similarly, competitive offers or pricing can stir
up things and impact how customers behave. Rather than trying to re-calibrate
predictive models manuallyforever testing when such models get less accurate,
then developing updated versionsadaptive systems will update automatically
without human intervention.
This capability is available in domains where the link between decisions and the
feedback about the quality of those decisions is unambiguous and the time lag
relatively short. That is, its possible to give the system a slap on the wrist when
it makes a bad decision (or reward it for a good decision), and the slap follows
the bad decision in quick order. In such domains (and there are many that qualify
outside CRM and marketing), the iBPM solution becomes proactive, not reactive
as is typically the case. Its one thing to effectively measure that change is needed,
Vs. static predictive (often used as a synonym for predictive).
15
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and then be able to make that change in an agile manner. Its quite another to fully
automate this process and have the improvements implemented by a self-learning,
adaptive system.
From Business Intelligence to Intelligent BPM

iBPM solutions can adapt or change the various recommendations they give to
customer service representatives, such as recommendations for up-selling, crossselling, predictive customer service, optimizing underwriting rules, fraud and risk
avoidance, treating different customers differently, or sales process optimizations.
We put all of these concepts together in this rather busy illustration. You want
your solutions, in the combination of this dynamic between iBPM and business
intelligence, to be actionable and adaptive. This is represented by the X-axis. You
also want to have as much business value as possible. This is represented by the
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Y-axis16. You can take actions from historic reports, data warehouses, or data marts
with online analytical processing. You can also take action by performing predictive
analytics on historic data. As you go to the right, you deal with real-time iBPM data.
You can have real-time actionable reports, where business owners can find out
what is going on in their organizations and immediately take action, and even define
business rules to take actions. You can do real-time process optimizations by mining
the process data. When it comes to the actionable and adaptive dimension, as well as
optimized business value, the most promising aspect of the dynamic in iBPM
is represented on the top upper-right hand corner as predictive and adaptive iBPM.
This is similar to the Business valueKnowledge Discovery we saw earlier, but here with
special emphasis on the actionable and adaptive.
16
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Example: Handling Customers Intelligently

Vision: An international bank wanted to provide an exceptional experience at the account
opening process. The bank believed that the relationship had to start off well, as the first 90
days of a banking relationship is when 70% of all extended business with clients typically
occurs. Navigating through manual processes on the dozens of screens in numerous legacy
systems just to create a new account was making the customers first experience with the
bank a painful one. The bank set out to design a new account opening system that would
provide a fast, simple, and engaging experience while gathering data from the customer.
Solution: The international bank found the advanced technology it was looking for with
iBPM. Its iBPM-enabled solution enabled the banks client advisors to share their screens,
directly interacting with their clients, and showcasing their world-class system. The system
integrated tens of legacy systems, intelligently automated over 150 processes for account
opening, and enabled the bank to gather
information about its customers. Beginning
with account opening, predictive analytics
contextually make recommendations to clients
at every step of the relationship. These helpful
recommendations create a more meaningful
relationship for the customer as the individual
now feels the bank knows them personally
and not as just another body.
Results: The bank saw its relationship opening time reduced from 25 to 15 minutes. The
pleasant first experience and consistently personable relationship realized a 10% lift in
additional product sales and a 50% increase in activation for add-on services. In just 12
months, there was a 40% increase in the companys Net Promoter Score relative to its
competition. The bank was able to create a customer experience that clients shared with
friends, family, and colleagues. The bank used iBPM to redefine the banking relationship
and create an environment where they could build customer relationships that would last.
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CHAPTER 5
The Road to SOA Success Runs through iBPM
In this chapter, we turn our attention to the service infrastructure and focus on the
relationship between service-oriented architectures (SOA) and iBPM. We would like to
do that in the context of service-oriented enterprises (SOEs)17. SOEs are enterprises18
that see themselves as service producers or providers, as well as service consumers.
There are actually three perspectives of service-oriented enterprises: a business
perspective, a technological perspective, and perhaps most importantly, a
cultural perspective.
Business Perspective of SOE

As we discussed in Chapter 1 and illustrated here, the B in iBPM contains KPIs
and business objectives. These could be tied to automated and executing business
process applications. The B also covers business requirements, which can be
captured directly in the iBPM solution. The B helps business innovation, as well as
business change and agility, all realized through the iBPM system.
For more information on Service-Oriented Enterprises, see my book on http://www.pega.com/
featured/soe%20, or on Amazon.com.
18
Service-Oriented Enterprises are also Adaptive Enterprises, but the focus here is on the
relationship between SOA and iBPM.
17
65
The organization pursues business objectives, specific measurable strategies

supporting these objectives, and underlying business performance measures for
these, either from data warehouses or business activity monitoring of iBPM-based
applications. This gives the business strategic measures for overall enterprise
performance management and business performance dashboards, where the
business attempts to gain insight and act upon data that is obtained from historic
as well as real-time activity monitoring of the applications built with iBPM.
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Technological Perspectives
At the other end of the spectrum, you have SOAs with a technology perspective.
SOA is actually an architectural pattern that involves a loose coupling of service
providers and service consumers.
Loose Coupling: This means that you can use the service and integrate it within
your application, while at the same time you are isolated from the details of the
services implementation language, platform, location, or status. SOA entails
the reuse of services. So, once certain aspects of the application programming
interfaces of services are exposed and a contract is defined, they could be
invoked through a service producer-service consumer interaction. This provides
a lot of flexibility for service connectivity within the enterprise as well as between
trading partners.
Standards Based: SOA tends to be standards-based. This is especially true with
web services standards, such as SOAP, WSDL, and WS-Security. Increasingly,
organizations are using the REST (Representational State Transfer) architectural
style for service interactions. SOA through SOAP is based on XML and is quite
verbose and complex. There are many standards associated with SOAP for
security, reliability, transactions, and more. SOA through REST is much simpler
and relies on readily available standards, such as HTTP and JSON19 as well as
HTML or XML. REST architectural style can potentially provide the same level
of security and reliability as SOA through SOAP standards. Furthermore, many
mobile devices and cloud services leverage REST for their apps.
http://www.json.org/
19
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Registry: SOA typically involves registry protocols as well as discovery, where

service providers can register their services and be discovered by service
consumers. Each service description is an asset that is configured and
leveraged in complete iBPM solutions. Increasingly the trend is to have a unified
iBPM repository that organizes the iBPM assets (that in addition to the services
also contains various types of business rules, decisions, case structure, flows,
and UI.) The iBPM repository can be organized in layers along a number of
dimensions such as type of product or service, geographical location, and type
of customer. The underlying iBPM engine can then invoke a service, apply a
rule, or provide a user interaction based on the context of the task or service
invocation. This contextual and layered organization and execution of policies
and procedures provides tremendous advantages for sharing and customizing
the iBPM assets.
Composite Applications: SOA supports the composition of services. Largergrained services can be built through the composition of smaller or finergrained services. Thus a dynamic case management solution that accesses
internal and external services is a composite solution that itself can become
a service producer. The ease of composition of service consumers and
service producers in the robust business-oriented solutions is a tremendous
advantage of SOA through iBPM. For example, an end-to-end supply chain
application built as an iBPM solution can access, through services, various
supplier and product information from internal systems of records. It can
also invoke external supplier and distributer trading partners. As a composite
application, it can provide service interfaces (as a service producer) for its
customers to check the status of shipments.
Enterprise Service Bus: Perhaps most frequently when an enterprise embarks
upon an SOA project, they consider various types of enterprise service buses
(ESB). An ESB is a brokering technology in the plumbing infrastructure backbone
of an SOA architectural pattern. An ESB will support brokering of transport
protocols, message transformation, reliability, security, and connections to
back-end systems. When a message is sent by a service requestor, at the
requestors end point the transport mechanism with the ESB gets involved and
communicates the message to the internal ESB layers for further processing.
There could be several transport mappings and transformations of the message.
The key point is that the underlying transport processing of the ESB allows you to
have communication transport independence: A requestor can communicate with
a provider via its own protocol without worrying about the providers protocol.
The transport processing mechanism within the ESB takes care of the
mappings to and from the various standard protocols. SOA provides integration
or invocation of services that are either internal within the enterprise, or are
external services provided by third parties. So, in this technological perspective,
SOA is very much plumbing and IT-focused.
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Cultural Perspective of SOE

Now, as noted above, one of the most important perspectives of service-oriented
enterprises is cultural. In this perspective, the SOE views itself as a service producer
as well as a consumer for various communities. These communities include
customers, to which it provides the best customer experience; shareholders are
provided with the best value; and employees are enabled with empowerment,
as are partners or outsourcers for optimized service chain management. In this
cultural perspective, the SOE provides transparency through automated processes.
It demonstrates agility by introducing change or new solutions, or responding to
customer requests.
Therefore, a SOE has its focus on customers. But the employees, partners,
suppliers, and investors are also communities that need to be served. Service
orientation is first and foremost a culture and a mindset. It sees every entity as a
customer that needs to be served in the best way possible. When a service helps
a customer readily obtain the latest information about a product, that is service
orientation in action. When a customized product or service is produced within
budget and on time, this is also service orientation in action. Almost every type of
service work that is carried out within or across enterprises involves policies and
procedures, executed as business processes. SOEs focus on handling these various
types of communities with very purposeful interactions and the overall efficiency of
automated processes.
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iBPM and SOA
iBPM is the core component that allows organizations to orchestrate their services
and provide business (service) value to various communities. As illustrated here,
when we look at the service-oriented enterprise architecture, we see at the lower
level the IT service infrastructure that provides brokered service access to a plethora
of back-end systems or trading partners. These could be the legacy systems,
point solutions, or systems of record. At the other end of the spectrum, you have
enterprise performance management with business objectives and dashboards.
iBPM bridges the gap between enterprise business objectives and the overall IT
services that support them. The road to SOA success runs through iBPM, providing
increased business value, the agility to introduce change, as well as automated
guidance for human interactions. Human participants, back-end systems, and
partner services all become part of the iBPM solution. And yes, this solution
leverages the underlying plumbing or infrastructure that is captured in operating
systems, networks, multiple service stacks, as well as enterprise service buses.
iBPM delivers the process-level orchestration and integration of services, provided
either by internal applications or external trading partners. The iBPM application
itself can publish a service. For example, the process flow or an aspect of the
application of the iBPM solution can become a service that is itself consumed by
other applications. The focus of iBPM is agility and business value for innovation,
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Chapter 5
transformation, and change. The focus of the core plumbing and enterprise service
bus strategy is on IT value (security, reliability, performance), which is equally
essential. iBPM participants include human participant roles as well as services
(internal or trading partners). The focus of the service architecture layer through
ESBs is on service-to-service integration. The SOA plumbing brokers a standard
system integration support that is leveraged by the higher iBPM layer.
iBPM is both a service consumer as well as a service producer. iBPM can invoke or
interact with a service, either directly or through an ESB. Thus, within a process,
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services are invoked to retrieve information, update, or otherwise invoke a method

or operation in a remote service. Similarly, aspects of the iBPM solution could
be published as a service. There are two terms that are often associated with
business processing involving servicesorchestration and choreography. Please
watch how these terms are used as the concepts behind these terms are important,
but they are used interchangeably sometimes, and the distinction between these
terms is often blurry.
Orchestration deals with the ordering of service execution in process flows. The
orchestrated web services are typically executed by a process engine that invokes
and controls the services. These ordered services can include trading partners
and some of the services can be executed in the context of a transaction.
Orchestration of services implies the orchestrated process is actually executed
by an underlying process engine.
On the other hand, choreography represents abstract processes (in the sense
that it is not necessary to have an actual process engine that is executing the
choreography), that illustrates the order of message exchanges between applications
or more often between trading partners. Multiple parties are involved, and these
parties exchange messages of specific types and invoke prescribed operations. So
orchestration means there is a process engine that is executing the process, while
interacting with or involving internal and external participants. iBPM supports this
model. Choreography captures distributed processing involving multiple engines
and participants without centralized control (the process engine). In fact, multiple
process engines could get involved to realize choreographies.
iBPM Helps Organizations Succeed with SOA

The following five principles illustrate how iBPM can truly become the success
enabler for SOA:
1. iBPM Alignment of Business and IT: Through an iBPM focus, business and IT
can speak the same common iBPM language. iBPM focuses on capturing
and automating business requirements or objectives. SOA is often focused on
building a strong technical architecture foundation. iBPM helps ITs SOA initiatives
prioritize and focus on those aspects of the service architecture that are directly
linked to business value. This iBPM focus and prioritization helps link business
performance objectives to SOA infrastructure capabilities. It also helps direct
the SOA roadmap through business priorities, and not just technical
considerations. For example, in a customer service contact center, business and
IT can cooperate when building the iBPM solution to improve resolution times.
The iBPM solution will leverage the SOA infrastructure, especially in obtaining
the most appropriate customer information for the process. This could potentially
involve a variety of services accessed via different protocols.
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2. Reuse of iBPM Solutions as Corporate Assets: The reusable assets in iBPM

consist of process flows, UI, different types of business rules, organizational
roles, case types, and yes, services. So, services are one of the components
in reusable assets that provide business value. iBPM thus provides the
business process context for reusable services. Services are potentially reused
in multiple iBPM solutions. However, for each, there is an iBPM reason and
overall context in a business solution.
3. iBPM ROI Success with Quick Results and a Top-Down Iterative Methodology:
With iBPM, you can start small, achieve success, and grow. More importantly,
business stakeholders and IT can quickly realize results with tangible benefits.
Sometimes, SOA initiatives are big-bang projects that attempt to completely
restructure the technical foundations. The resulting re-engineering efforts
take a long time, with little to no tangible results. While re-architecting can be
a desirable goal for the long term, it makes it difficult to demonstrate success,
especially for the business stakeholders. iBPM can quickly show ROI, while
leveraging SOA and infrastructure capabilities. This enhances the visibility and
value of SOA.
4. iBPM Support for Change and Agility: It is relatively easy to introduce changes
to iBPM solutions. iBPM can also organize the changes in repositories that
maintain not only services, but also complete iBPM solutions. Typically, changes
are realized with zero coding through changing executable forms or models. SOA
also claims change and agility. However, agility and change in SOA are
considerably more complex. With iBPM, and especially in the business context of
change, services can participate in agile solutions. Providing a common contract,
or protocol, SOA initiatives can incrementally improve service implementations
while participating in iBPM solutions that change more frequently.
5. iBPM Intelligence for SOA: iBPM supports automation involving both human
participants and services. In particular, process automation includes structured
processes, orchestration as well as choreography of services, and dynamic
cases. But as we saw in Chapter 4, iBPM also includes a rich collection of
business rule types and their execution and analytics for decisioning. The
rules and the smart engine that runs them, as well as decisioning based on
analytics, can also be leveraged for services. What does that mean? Here
are some examples:
a. Just-needed and just-in-time invocation of services in a specific
context: This can greatly improve the responsiveness of the dynamic
case management solution. Business rules and business logic are
leveraged to decide which source to go after, when, and in what
connection for a specific interaction.
b. Processing and handling of events from services or the application as
needed, with business logic applied as needed: Services are participants.
They can have lifetimes and changes of state. They can be late in responding
to service invocations. The service responses sometimes need to be
correlated to streamline the case processing in the iBPM system.
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In summary, iBPM solutions include the active participation of enterprise systems

and trading partners. The systems can be databases, ERP applications, legacy
applications, document management systems, or any enterprise application required
to complete the work. These systems are accessed through service invocations in the
SOA which is supporting the discovery, message exchange, and integration between
loosely coupled services, using industry standards. Each party complies with agreed
upon protocols and carries out its part in the overall execution of processes involving
services. iBPM provides the core context for SOA, and bridges the gap between
business performance and IT infrastructure, providing an excellent catalyst for SOA
success. At the end of the day, SOA needs to demonstrate business value and iBPM
needs to fit seamlessly into existing enterprise architectures. iBPM is a great enabler
for SOA by aligning business and IT, building reusable assets, showing tangible ROI
benefits, and supporting change.
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Example: iBPM and SOA in the Public Sector

Vision: A state agency wanted to improve usability of its unemployment insurance benefits
system, such as call handling times, training time, and error rates, as well as increase the
agility of application development
and maintenance. The system was a
legacy DBMS environment. Data
structure limitations and coding
constraints with business logic
buried inside the code was burning
ITs budget and time.
Solution: At first, the agency made an investment in a software product that helped
generate web services from natural code. It then upgraded its mainframe after it
overloaded during the economic downturn, but was still not pleased with the performance.
Instead of finding another web services product, the agency decided on an iBPM solution.
Using a bottom-up approach, it leveraged existing infrastructure to minimize the cost and
frustration of further infrastructure development. The iBPM solution provides seamless
integration with the agencys legacy DB2 environment.
iBPM generates and consumes web services to considerably increase development agility.
Whenever the agency needs to change or update an application, it can wrap the existing
legacy system immediately to renew its use and value within the iBPM application. The
agency was very pleased to be able to leverage its existing systems. In addition, instead of
business logic being hidden in code, iBPMs strong business process modeling capabilities
substantially improve transparency for all users, both business and IT.
Results: The agency has experienced increased agility, transparency, and control
on the back end, making for easier system maintenance and development. On the
front end, the new interface is reducing training time for new employees, enabling users
to quickly and easily identify issues with a customers unemployment claim, and
shortening the overall transaction time.
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CHAPTER 6
Social Networking and Mobile iBPM
Weve looked at how an iBPM fits in
the enterprise ecosystem as the core
layer between business performance
and the underlying technology
service infrastructure. But today,
enterprises are about social
networking for greater connectivity,
transparency, communication,
and collaboration between various
internal and external business
communities. Increasingly, organizations are accessing social networking services
through mobile devices. This trend is accelerating, and in a few years the majority
of Internet access will happen through mobile devices. In this chapter, we cover the
relationship between iBPM, social networking, mobile and collaboration.
Social networking is booming via a number of community sites such as Facebook,
YouTube, LinkedIn, Google+, and Twitter20. Some of these sites have hundreds of
millions of members. While the first generation of the Web focused on relatively
static websites and a basic Web presence, the current generation of tools and
capabilities is a part of Web 2.0. Web 2.0 focuses on interactions and communities,
especially social networking, with tools such as wikis, blogs, instant messaging,
shared whiteboards, electronic meetings, as well as various types of collaboration
portals that allow communities to innovate and share experiences. The other
pervasive technology trend is the proliferation of mobile devices (tablets, smartphones)
as the preferred medium of broadband
consumer Internet connections. Mobile
technologies have empowered people
and accelerated the pace of adoption of
social networking. The readiness, availability,
and richness of social apps on mobile
devices have caused an explosion of
social interactions.
The third leg of the stool for this modern and advanced interaction model is the
cloud. Chapter 13 expands on Cloud iBPM, especially iBPM-driven solutions
Facebook is a trademark of Facebook, Inc. Twitter is a registered trademark of Twitter, Inc.
YouTube and Google+ are trademarks of Google Inc.
20
77
delivered as Platform and Software as a Service (PaaS and SaaS). Most mobile apps
and social networking services are actually deployed on the cloud. Mobile cloud
computing combines mobile networks to cloud services over the Internet. Thus social
networking applications are deployed on mobile devices, interacting with services
on the cloud. Since the iBPM solutions can be deployed over the cloud, they can be
accessed over the Internet with the appropriate credentials and authorization.
Mobile devices are becoming the preferred option for enterprise solutions and
enterprise access. Thus parallel to the explosion of cloud applications, we are
witnessing the explosion of apps for mobile devices. In fact, the two are coalescing.
Solution vendors on the cloud are supporting browser and mobile apps for their
applications, with the adoption of the latter far exceeding the former. Similarly, very
large enterprises are providing browser and mobile apps to allow their customers
access and social interaction.
Collaborating Via Mobile on the Cloud

There are a number of ways that we could classify and categorize social
networking via mobile applications on the cloud. Essentially there are two
dimensions for thisthe time of the collaboration and the place of the
collaboration. The following table lists some of the cloud and mobile enabled tools
in the time and place dimensions.
Synchronous collaboration refers to same-time (real-time) communication. This

happens when workers are brought together in a single virtual location such as
virtual meeting rooms or through telepresence Synchronous collaboration can also
take place across locations through the use of chat, instant messaging, webinars,
and shared applications. Today, a great deal of work is being conducted throughout
the enterprise that leverages synchronous collaboration tools, with webcasts and
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Chapter 6
instant messaging being

the most prevalent. Perhaps
the most popular of these is
texting (or instant messaging
(IM)), which is very trendy
among younger generations.
Instant messaging and sametime electronic hangouts or
meetings are other examples
of synchronous or real-time/
same-time collaboration.
Asynchronous collaboration refers to social networking that is happening at
different times. This can be in the same virtual or real location such as a posting
on a forum thread or a blog reply. It can also happen in different locations through
workflow, calendaring, and traditional e-mail. For example, commenting on
YouTube videos, Facebook posts, or on blogs can happen at different times. The
most popular of these is e-mail. However, there are also forums and even the ability
to create content. Wikipedia would be a prime example of collaboration at different
times to create encyclopedic content.
Why Social Networking and Collaboration?

Why social networking and collaboration? Well, because social networking and
collaboration allow stakeholders, customers, and business managers to be listened
to and understood. Sharing ideas and providing feedback or comments is extremely
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important. Listening and communicating empowers various stakeholders through

involvement in fresh interactions and real-time feedback. They are listened to, and in
some cases, they are able to contribute to innovation by authoring content or building
solutions collaboratively.
Social networking via Web 2.0 has empowered people with the tools to effectively
collaborate in their personal lives. Communities increasingly leverage social
media tools such as forums, blogs, social networking sites, podcasts, tweets, RSS
feeds, wikis, and others to exchange ideas and interact. Social media has become
a powerful channel for customers to provide their commentary on products and
services, and organizations are starting to notice the impact of the voice of the
network on their bottom line as social media posting can go viral in an instant. One
of the textbook examples of this is United Breaks Guitars,21 among many others.
Furthermore, social media tools have now penetrated the enterprise to promote
intra-communities and exchanges for improvementthis is sometimes called
Enterprise 2.0bringing the capacities of Web 2.0 within the enterprise. Customers,
trading partners, and employees are all energized for better communication
and innovation through social networking tools deployed on the cloud and accessed
via mobile devices. Their voice is communicated and heard in various social
communities.
Social networking is also an important channel for the business, especially for social
customer relationship management. Increasingly, the communication boundaries
between external customers, the enterprises trading partners, and its employees
are blurring with a proliferation of social media tools. This promotes increased
transparency and openness, especially for innovation.
For all of these categories, the business needs to have a context for an eventual
resolution of the issues raised by the social exchanges. Lets look at how iBPM
creates a context of collaboration through Social iBPM.
Social iBPM
In the end, it is all about success. In business, entertainment, politics, and almost
every facet of life there is a newly re-energized voice. This voice cannot be
constrained within any existing structure or organization. It is a powerful voice that
is changing societies throughout the world. And it is a voice that is making and
breaking businesses. Reputations rise and fall because of this voice. It is a voice that
is leveraged by organizations and individuals alike to create and promote unique
A disgruntled customer created a video describing how the airline mishandled and broke his
guitar. The posting resulted in 3 million views within one week. See http://en.wikipedia.org/wiki/
United_Breaks_Guitars
21
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brands. It is unstoppable and robust. It is the voice of networked communities, often

created in an ad-hoc fashion, united through a common interest and made possible
through the use of social media.
While the potential impact of social networking is enormous, the real challenge
is how to operationalize and realize its potential. All the interactions, tweets,
forums, blogs, or wikis will amount to nothing if they are not intelligently mined and
translated into action. Through innovation, feedback, and collaboration between
community members, the chances of success for specific initiatives or the enterprise
as a whole are greatly enhanced. So, what does social networking and collaboration
have to do with iBPM? Well, just about everything.
Continuous Improvement with Social

The following illustration shows the continuous improvement lifecycle of iBPM
solutions. Starting with directly capturing the business requirements, innovative
solutions are built. There are many opportunities to collaborate and network to
reflect the needs of the stakeholders during this requirements phase. For example,
stakeholders can leverage approval processes, provide feedback on case design,
and hold iBPM-enabled sessions to improve the solution.
Once the requirements are captured and automated within the iBPM tool, the cases
of these solutions and processes are executed. During the execution of the dynamic
case, there are ample opportunities for social networking and collaboration, such as
81
discussion threads on the case or live chats with the customer or experts, all in the
context of the moving the case towards its resolution.
Social networking can also be leveraged in business activity monitoring and
reporting drill downs. Business stakeholders can escalate, discuss, provide
improvement feedback, and comment on the overall performance of the operators
or cases. There is continuous collaborative monitoring and improvement
leveraging social networking services. Collaboration in making changes to the
assets of the process helps the enterprise, iteratively and continuously, improve
the processes as well as the dynamic case management solutions. At the core
of this continuous improvement lifecycle, you have the enterprise repository of
iBPM assets, such as processes, decision logic, case types, expressions, UI, and
integration. Social networking for modeling or process discovery and definition
supports innovation by speeding the analysis and definition of processes and case
types involving the business.
Mobile and Social for All Phases and All Communities

So, what is the relationship between iBPM and social networking? Well, social
networking tools empower and foster innovation in each and every one of the phases
of the continuous improvement lifecycle of iBPM solutions. As discussed in the
previous section, social networking for modeling or process discovery supports
innovation by speeding the analysis and definition of processes and case types
involving the business. Collaborative interactions and feedback, whether it is for
modeling or for executing the cases, allows the various members of the communities
to share ideas, issues, and improvements. Collaboration during the execution of the
processes means involving all types of workersincluding knowledge workers22
and resolving the automated case using the best resources within the enterprise.
Social collaboration optimizes and streamlines dynamic case work by the various
iBPM participants and parties who form the communities involved in discovering and
executing iBPM solutions.
On the other hand, for social networking services, iBPM provides the context
of collaboration. In other words, social networking benefits from iBPM. When
individuals or communities use various types of social networking tools without
iBPM, they are isolated from the business objective or context. It could be as simple
as an instant messaging interaction or an electronic meeting. Often, these types of
social interactions are isolated and siloed from what is happening with the business
processes. The iBPM context answers the questions: Why are we collaborating?
At what step in the process? At what phase of the case? For what type of process
discovery or innovation?
See Chapter 9 for more discussion of knowledge workers.
22
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We can organize the various real-time and asynchronous collaboration opportunities

along two perspectives:
Increased business value
Increased challenges in collaboration within various iBPM communities.
Increased business value spans the various phases of iBPM solutions including
building and discovering process and case applications, executing the dynamic
cases, and improving the iBPM solutions. Those are illustrated on the X-axis. On
the Y-axis, we have various communitiesdepartments or functional units, lines of
business, cross-departmental or business unit functions, and the iBPM value chain.
There are at least three categories of societies for social iBPM:
iBPM Projects within the Enterprise (Line of Business (LOB) or Cross LOBs):
This is perhaps the most obvious application area for social networking.
When building, executing, or analyzing the performance of applications, you
can have social interactions between different community members in each
phase. The iBPM project can pertain to one business, or span an internal
value chain across various functions or lines of business. For instance, a
sales process or a customer service process is specific to a functional unit or
department. Manufacturing a product, on the other hand, crosses multiple
business units such as marketing, engineering, sales, warranty service, and
distribution. The fundamental difference is the reporting structure. A process
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within a function or unit has participants in the process all reporting to the
same manager. Processes across functional units or departments imply
a matrix organization and are more challenging when it comes to social
networking.
iBPM across the Trading-Partner Value Chain: Enterprises typically
interact with partners, service providers, suppliers, and customers. The
value chain of processes spans across organizations. This is similar across
line-of-business processes, but now at a larger, cross-organizational level.
As a result, this next level of iBPM collaboration can potentially involve
many more participants across a value chain. Here, business-to-business
communities can engage in social networking. Expectations and experiences
can be shared across organizations. Ideas for innovation can spur the
development of new products or services.
iBPM Social Communities: Finally, you have the iBPM social communities at
large. These communities can network on iBPM standards, best practices,
methodologies, and templates. Sometimes competing organizations become
members of the same community. There are several ad-hoc discussions
and research communities on iBPM in general, as well as iBPM bloggers.
Greater value, however, can be achieved if the community is focused on a
particular domain and a particular vertical.
We can leverage real-time collaboration or asynchronous networking tools across
the entire spectrum of the iBPM continuous improvement lifecycle. Of course, if we
have departmental or functional units, it is much easier to collaborate. The higher we
go up on the Y-axis, the more challenging it becomes to collaborate and have social
networking with specific value for the iBPM solution.
The potential impact of social networking is enormous. But the biggest challenge
is how to operationalize and realize the potential. All the interactions, tweets,
forums, blogs, or wikis will amount to nothing if they are not intelligently mined and
translated into action. iBPMs continuous improvement phases, including model
development, execution, and performance monitoring, can all benefit from social
networking . So while social networking supports and augments the various activities
of the iBPM continuous improvement lifecycle, iBPM provides the context for
collaboration, enabling meaning and relevance for all of the social commentary.
Analytics and Social iBPM

In Chapter 4 we explained the importance and emergence of predictive and adaptive
iBPM. Gaining insight from data through data mining and operationalizing the
discovered models in the context of iBPM solutions provides tremendous business
value. Typically, the analysis of historical data, as well as the use of an adaptive
predictive model, applies to structured data which is stored either in transactional
databases or data warehouses. Building upon the iBPM/social networking synergy,
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we can take the potential of social networking to its logical conclusion to determine
how businesses can adapt in response to the sentiments in the voice of the network
(most importantly their customers) through three critical high-tech advances:
1. Proliferation of social media (discussed above)
2. Dynamic case management (discussed in Chapter 9)
3. Monitoring and analytics, including text (discussed in Chapter 4)
Handling the voice of the network needs all three components in continuous
interaction and improvement lifecycles. In the following sections we delve into
each one of these and see how they contribute to operationalizing and mobilizing
enterprises to respond to the voice of the customer.
As discussed in Chapter 4, predictive analytics is the science behind mining data
for repeatable patterns that are reliable enough to serve as a basis for predicting
the future. In iBPM, the focus is on the operational execution of the processes
and policies that support the business rules. In predictive analytics, the focus is
on analyzing the historical data and discovering related patterns or models that
incorporate the statistical relationships uncovered in the historical data. iBPM allows
you to directly capture and execute the discovered predictive models.
Predictive analytics can be used with most social media interactions, which are text
based. When text analytics are applied to the voice of the network, they can evaluate
the text included in communications, create analytical models and interpret the
intent of the sender. There is a spectrum of techniques for analyzing text including
simple filtering, syntactic analysis, and natural language parsing as well as more
advanced techniques for recognizing semantics and even sentiment recognition.
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Proactively, a company might monitor social media channels and analyze through
filters that recognize tokens within text for specific categories, such as product
names, company names, dates and times, and location, to name a few. The channel
of the text could be social media which is public or posted via e-mails or forums
hosted by the organization. Syntactical recognition of specific token types is relatively
simple, but can yield interesting results. Combinations of recognized tokens or
patterns could be used to create clusters over time, to analyze trends mined
from social media. For instance, negative comments about a product brand in a
specific region might be indicative of a quality problem in a shipment. Recognizing
this in real time and responding to it by halting shipment could potentially avoid
embarrassment, bad social press, or worse. iBPM provides not only the analytical
capabilities themselves, but also the vehicle by which those analytics connect the
voice of the customer to the most impactful actions and business results, especially
through dynamic case management. Analytics, by mining the voice of the customer
expressed via social networks, help iBPM solutions to not just do things the right
way, but do the right thing using dynamic case management, which we will examine
in detail in Chapter 9.
How about Mobile iBPM?

So far the discussion has focused primarily on social iBPM.
However, in conjunction with cloud computing, the majority
of social networking interactions are now conducted over
mobile devices. These devices are permeating not only
consumer markets, but also the enterprise as the means to
conduct business.
An important trend here is the emergence of the mobile
workforce. Leveraging smartphones and tablets, workers in many
industries are carrying out work leveraging mobile applications.
Mobile iBPM will allow organizations to seamlessly initiate
and complete automated case work via mobile devices. This
work will pertain to dynamic cases involving various categories
of participants, all interacting via mobile devices. This ability
to interact via mobile devices is particularly important given
the changes in the mobility of the workforce itself. The instant
accessibility of case status, case work, and case
collaboration via mobile means empowerment of
a whole new category of mobile workers. Not only
are they looking to simply stay connected, they
are actually completing transactions and work via
smart mobile devices. More specifically, through
mobile iBPM workers will be able to:
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View their cases and the work assigned to them

Monitor the status of cases and workflows via mobile devices to determine
potential bottlenecks
Instantiate new cases on the spot with their mobile devices
View the details of the case and potentially have social interactions/discussions,
comments, notes, etc.
Carry out tasks on cases, such as approving, rejecting and escalating a case
Getting events and alerts pertaining to their cases via the mobile devices
notification facilities, such as calls, beeps, and voice alerts
Leverage the mobile devices native capabilities, including rich media, GPS, and
camera, to name a few, to complete, augment, and process work
The mobile iBPM capabilities bring substantial productivity improvements to mobile
workers. In addition, the consumer now expects a mobile customer experience from
their vendors. Thus mobile iBPM applications are needed for both mobile workers
and consumers. The latter could use a mobile iBPM application to open an account,
submit a claim, or monitor the status of a case. Increasingly, the competitive
standard is established by popular apps, such as the ones from E*TRADE and
Amazon, and consumers expect to have similar experiences with iBPM applications
provided by the enterprise.
More importantly, the experience of the worker or the consumer should be consistent
across multiple channels including the Web, mobile, or social. One important
aspect of the i (intelligence) in the iBPM platform is to render the user experience
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optimally on any platform or device. The iBPM developer should be able to design
the graphical interface just once, and then have that interface rendered optimally on
each channel, especially smartphones and tablets, by leveraging built-in responsive
web design23 (RWD) features. With traditional development, the user interface needs
to be manually tailored for each platform. Given the fact that each mobile operating
system has its own specific and different development platform and language,
such as Objective C for iPhone and iPad, manually customizing the user interface
of iBPM dynamic case solutions will be time consuming, error prone and difficult
to maintain. Thus design once and run everywhere is ideal for agility, speed of
development, and support for multiple platformsas well as maintenance. As the
illustration shows, the everywhere not only includes smartphones and tablets, but
also spans to social networking platforms such as Facebook as well as the more
conventional internal back-office, front-office, and websites of the organization.
Wikipedia (2013). Responsive Web Design. Last Modified July 26, 2013. http://en.wikipedia.
org/wiki/Responsive_web_design
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Example: Mobile iBPM Payments

Vision: A mobile payment software company provides an
affordable payment platform for mobile network operators,
financial institutions, retailers, and brands. Individuals and
companies pay businesses on their mobile devices easily,
efficiently, and securely. The company wanted the ability to
specialize its services that span across different channels,
networks, regulatory boundaries, and geographies. It also
wanted to reduce time-to-market to keep up with rapid
technological advances and cultural trends. Most importantly,
the company wanted to capitalize on the massive volume
of data collected from consumers mobile devices to glean
valuable business intelligence.
Solution: The mobile platform company chose to address these opportunities through the
powerful analytics and decisioning capabilities of iBPM. iBPM provided the company with
control and governance of its core platform with the ability to drive customer specialization
and flexibility into any area of the world, on any channel. Predictive and adaptive analytics
mine the unstructured mass of mobile and
social data to create actionable predictive
models. The iBPM system presents to customers
the next best offer or service on their mobile
devices. As the customer relationship grows,
iBPM continues to learn more about the
customer, enabling it to contextually bring the
next best offer or service directly to the
individual customer.
Results: The mobile platform company has acquired deeper marketing insights, resulting
in enormous financial returns. It has reduced the cost of operations, increased access to
new markets, and delivered more services throughout the world.
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Legacy Modernization through iBPM
iBPM leverages social networking tools and mobile solutions to support
collaboration between various internal and external business communities and
provides the context of collaboration. But even as enterprises take advantage of
these modern tools, the reality is that there are still many incumbent enterprise
resource planning (ERP), point solutions, and home-grown legacy systems (most
often in archaic programming languages such as COBOL), that are difficult to
understand, maintain, or change. Putting lipstick on the legacy pig does not work.
These systems are typically systems of record and are essential for keeping the
lights on. However, they are difficult to maintain and do not inspire agility. In this
chapter, we focus on legacy modernization through iBPM.
There are many reasons why organizations need to modernize. The following
highlights the pain-points associated with legacy systems:
IT Overwhelmed with MaintenanceNot Innovation: Often, organizations have
millions of lines of undocumented code. In some organizations, upwards of 80%
of the IT budget is spent maintaining legacy code or legacy systems. This is the
main reason why IT has a project backlog and cannot keep up with the demands
of the business.
Legacy and Retiring Workforce: Some legacy
systems are home-grown programs written by
increasingly aging and retiring programmers. This
disappearing workforce keeps the policies and the
procedures, as well as how to work with these legacy
systems, in their heads. Since the code is typically
undocumented, there is a real danger of losing the
reasoning and business logic embedded in the code.
Ossified Processes and Business Logic: ERP or
point solutions are closed systems. The business
processes and business logic are both hidden
and difficult to change or customize. With these
type of solutions, there is an initial honeymoon
period, where the solution seems to fulfill business
requirements. However, very soon the need for
customization and specialization becomes apparent,
and the ERP and point solutions prove difficult to
extend and customize.
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Sophisticated Decisioning: Within legacy and ERP systems, it is difficult to

automate and handle sophisticated business decisioning and business rules.
A separate mechanism is required to extend and specialize these systems to
capture the business rules and sophisticated decisions.
Manual Intervention to Handle Exceptions: In advanced organizations, exceptions
are the rule. Exceptions could be raised by the ERP or legacy systems, or they
could go unnoticed with dire consequences. Exceptions need to involve knowledge
workers to handle complex decisions. For instance, assessment of potential
fraudulent transactions, approvals for large financial transactions or processing
of applications that have unconventional cases will involve workers who are
knowledgeable about the policies and procedures with exceptions.
For many organizations, the number one challenge is changing or upgrading existing
applications and legacy systems. Implementing or customizing new applications, and
making changes or adapting are the other two top priorities within organizations.
To address these challenges, organizations embark upon legacy modernization
initiatives. Unfortunately, these initiatives often fail.
Why Do Legacy Modernization Initiatives Fail?
There are four main reasons why legacy modernization efforts fail:
1. Big Bang Modernization Initiatives: Often with the best intentions, huge and
expensive initiatives are launched with modern architecture paradigms,
especially with service-oriented architectures (SOA). Since there are so many
legacy systems and the attention is on infrastructure and plumbing, these
modernization projects under the banner of SOA waste many cycles and
resources with little or no business value.
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Big- bang SOA projects typically deploy one or more enterprise service buses
and attempt to expose, as services, a large number of legacy, ERP, or database
management systems with no clear business objectives. ESBs can be overkill
a solution in search of a problem. A lot of effort is spent on architectural
integrity in the forms of paper-ware and model-ware, with little or no immediate
benefits. In other words, the modernization project is just a bottom-up approach
focused almost entirely on modern SOA plumbing.
SOA patterns have their place and are often essential. But overhauling large
collections of applications with a SOA stack from the bottom up, layer by layer,
with no top-down justification or rationale is the wrong approach. As we have
discussed, a modernization initiative needs to Think big, but start small,
introducing incremental business value. Large rip-and-replace monolithic
initiatives cannot keep up with iteratively changing market opportunities,
customer interests, business drivers, government mandates, and compliance
requirements. There needs to be a clear roadmap of inexpensive incremental
modernization steps that balance business visibility and ease of implementation.
2. Equating Modernization to Modern Languages, IDEs, Components, and
Platforms: Another reason why modernization initiatives fail is that they often
equate modernization to adopting modern languages or modern component
architectures, frameworks, or methodologies. These tend to be very complex
and require many artifacts, or they embed a lot of the business logic in code that
is cryptic for the business.
Large organizations often have millions of lines of legacy code written in older
languages such as PL/I, COBOL or C. There are also many examples of code
written in proprietary languages such as SAP ABAPTM. Some modernization
initiatives have attempted to replace or extend/expand legacy code with more
modern coding using languages such as Java, C#, or JavaScript. These
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languages and companion component frameworks are hip. The problem is that
object-oriented or component coding is still coding! The business logic is still
embedded in the code and it is cryptic to the business, providing little or no
business transparency. These supposedly modern programming languages
do have advantages as they provide a lot of flexibility and improve productivity
by going from structured languages to object-oriented languages, tools,
components or frameworks. The problem is that they provide value for IT. IT
resources often love these languages and platforms and reject modernization
through iBPM at inception. But these languages do not enable business-centric
modernization, aligning business with IT. When is the last time you saw a
business stakeholder go through Java code or use Eclipse?24
3. Ignoring the Human Participants in Modernization Initiatives: Legacy
modernization also involves cultural change and needs to include human
participants in the modernization initiatives, as they are impacted the most.
Often, human participants and cultural impacts are ignored in favor of technology.
As the previous point illustrated, modernization is usually equated with IT
modernization in the overall enterprise architecture stack while ignoring the
human participation. Actually, legacy systems, ERP systems, home-grown
systems and even modernized versions of these typically elevate exceptions to
humans. Managing exceptions can be the majority of the effort in an end-to-end
process, and these are thrown to humans with no governance, automation, or
enablement. If you take the total effort involved in resolving a customer service
request, just focusing on the operational or system areas without looking at the
automation or enablement of the human experts who must handle exceptions
results in partial and incomplete modernization.
Then again, how about the standard processing of tasks (vs. the exceptions)?
Well, here you have the flip side of the human dimensionthe resistance to
change. Since employees are trained on familiar (legacy) systems, replacing
them without understanding how the modern solution will make their lives
easier results in an inherent resistance to change. In addition, approaching
modernization with the same data-centric mindset that still requires business
users to be dependent on desktop procedures, knowledge management, and
training to use multiple siloed systems will not yield the most business value
from the initiative. This could jeopardize the success of the project, so ignoring
the human participant will put the modernization initiative at great risk.
4. Ignoring Governance and Center of Excellence for Modernization: At the end
of the day, no initiative can succeed without oversight and governance. This is an
obvious statement, but often a core cause of failed modernization initiatives. By
now, it should be obvious that modernization initiatives are complex. They involve
many legacy systems, home-grown solutions, legacy extensions, undocumented
http://www.eclipse.org/
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code, and a maintenance nightmare. That is the fait accompli side.

Then you have the stakeholders: IT with a desire for modern architectures and
languages; a diverse user community, some of whom are dissatisfied with the
current status and others who are wary of new solutions and change in general;
and perhaps most importantly, business managers and executives frustrated
with cost overruns, delayed projects, and systems that cannot keep up with
business objectives. The larger the initiative (the big bang), the more difficult its
governance. If a modernization project takes too long, by the time it is finished,
it no longer meets the needs of the business stakeholder. Modernization needs
a Center of Excellence (COE) with specific governance involving best practices,
prioritization, and project monitoring as discussed in Chapter 3. Modernization
projects will have much less of a chance for success without an established COE
that oversees the people enablement, the processes for best practices, and the
prioritization of modernization projects.
How does iBPM Help Legacy Modernization?

So far we have identified the problems and challenges of legacy modernization
using traditional approaches. Then how does an organization succeed in legacy
modernization? There are four robust ways where organizations can achieve concrete
modernization results through iBPM, addressing all the challenges and issues:
1. Think Big, Start Small with iBPM: It is difficult to find big-bang, long duration
and expensive IT modernization projects that have delivered on their promises.
Bottom-up IT and technically focused re-architecting simply does not work.
The iBPM approach is top-down and incremental, from business objectives to
operationalized iBPM solutions. While the overall big thinking transformation
and modernization vision will drive the initiative, iBPM lets you start small with
projects that can easily demonstrate business value, while minimizing risks.
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In any mid-sized or large enterprise, there will be many potential projects for
modernization and transformation. Analyzing quantitatively the projects that will
provide business value and reduce risk will help prioritize the transformation
roadmap and quickly demonstrate value from low-hanging fruit. On the impact/
risk matrix, there is less and less complexity, which means less and less risk
as you go right on the X-axis. As you go higher up on the Y-axis, you have higher
and higher business value and visibility. Each of the bubbles in the diagram
illustrates a specific iBPM-focused project that could be used to modernize a
legacy system or application. These are called slivers, which are essential to
success. After the initial successes with iBPM solutions modernizing legacy
deployment, the roadmap and maturity towards complete modernization can
proceed in incremental and iterative phases, always demonstrating value and
concrete results along the way. In addition, as the requirements for modernization and solutions change, iBPM can keep pace with these changes, ensuring
successand no one will argue with success.
2. Equate Modernization to iBPM: A business is defined through its policies and
procedures. In building iBPM applications you are actually constructing an
enterprise repository (assets) of these policies and procedures. These include
business rules of different categories as well as your process flows. The
repository also includes your information models (data), the user interaction
(UI), and integration (services). Modernization means to directly model and
automate the business and procedures in iBPM solutions. The business rules,
process flows, and cases become explicit and visible so that the business and IT
can collaborate to change and evolve them.
Modernization should be viewed holistically. On one end of the spectrum,

legacy and ERP systems can be wrapped through iBPM solutions. Wrapping
means that business solutions, including end-user operators and customers,
interact through an iBPM solution, which in turn accesses legacy services as
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needed. In some cases, the legacy solution is retired or replaced. At the other
end of the spectrum, you have the constant need to customize, improve, and
respond to change requests. With traditional approaches, this is attempted
through in-house development and IT-driven coding. iBPM-driven modernization
brings the perfect balance between these two. With iBPM, the business and IT
can speak the same language, communicated through modeled and automated
policies and procedures. The transparency and visibility of the processes
provide a unique opportunity to continuously change and enhance the business
solutions. So iBPM becomes the foundation for modernization with distinct
advantagesaccelerated development and deployment of business solutions;
complete visibility of policies and procedures; ease of change and maintenance.
All this, while leveraging current IT investments and modernizing the
enterprise incrementally.
3. Automate Processes with Human ParticipantsTransactional, KnowledgeAssisted, and Knowledge Workers: As we have discussed, legacy systems often
raise exceptions that need be handled by human experts. This creates silos
between the legacy solutions and manual exception case processing. iBPM
aggregates these through wrapping legacy systems as noted above, while at the
same involving the human participants needed to handle exceptions with
complete visibility. We will expand on the different categories and types of
human participants in Chapter 9. Suffice it to say here that the cognitive
knowledge workers who are essential for managing complex exceptions, can
now become active participants in dynamic case management solutions
automated through iBPM.
This automation of human activities and collaboration for all types of work
(structured and unstructured) as well as workers, especially in the context of
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legacy systems, is an important milestone in information technologies. The vast

majority of processes within organizations are either simply documented with
no automation, or ad-hoc involving a plethora of tools. Modernization with iBPM
automates, augments, assists and guides human workers in all categories.
iBPM targets the modeling and execution of processes that can handle both the
simple, straight-forward path as well as exception cases involving legacy
systems and humans. The human participants can be assigned tasks and
controlled by the iBPM solution so that business users have end-to-end visibility
and service level governance. It is the governed, automated, guided, and
collaborative execution of processes involving human roles or skills as well as
back-end legacy systems that make iBPM solutions extremely effective in
modernizing and transforming businesses holistically.
4. Implement iBPM Centers of Excellence and Governance: As discussed in
Chapter 3, no initiative can succeed without oversight and governance, and a
COE is the best route to achieve these goals. In terms of legacy modernization,
COE governance needs to reflect iBPM processes, people/roles, standards,
decision making, and deliverables that target modernization. Ideally, this
governance is complemented by an iBPM platform that provides tools and
constructs to help you directly realize the objectives, guidelines, and governance
practices of the iBPM methodology. In each iteration and phase of the
methodology, you would like to have the corresponding function in the platform
that helps and guides you in realizing the objectives of the iteration or the phase.
For modernization, iBPM COE governance should specify:

Modernization Best Practices: The adoption of best practices,
methodologies, and guardrails to guide team constituents is a core mission
of the iBPM COE. Given the fact that iBPM is the best bet to incrementally
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modernize and transform iteratively, while responding to continuous change

requests, an agile methodology is essential. The best practices specify how
end-to-end modernization and wrap-and-renew dynamic cases should be
implemented and operationalized, with the system-of-record static parts
delegated to ERP or legacy systems while the differentiated and innovative
cases, subcases, and processes are managed in iBPM. The iterative COE
methodology identifies the participants, artifacts, and phases of iBPM
projects. iBPM agile methodology is covered in more details in Chapter 10.
Modern Business Architecture: iBPM is the core of the modern business
architecture, as we will see in Chapter 11. The COE governance rationalizes
the application repertoire of the enterprise, determining the applications that
need to be built as iBPM solutions; the incumbent applications that need
to be wrapped; and those that need to be deprecated. The governance also
specifies the end-to-end reference architecturefrom business strategies
to iBPM solutions to the underlying IT infrastructurerequired for legacy
modernization. Often, modernization is equated with SOA initiatives, and, as
we saw in Chapter 5, the best way to achieve SOA success is through iBPM.
For service interfaces to legacy systems, the iBPM COE is also responsible
for the creation and management of reusable legacy integration assets.
Enablement: Because iBPM is a paradigm shift in building and deploying
applications, the COE needs to provide the promotion, training, and
certification of iBPM development talent within the enterprise. For
modernization, the iBPM COE governs the best architectural modernization
design patterns and continuous improvement strategies. iBPM is not a
panacea, and even with the best iBPM approach, governance and continuous
monitoring of results are essential to success.
The Journey to Application Rationalization through iBPM

Enterprises are living organizations. They grow; they acquire and merge; they extend
and expand. Responding to business pressures, organizations often do not have the
time or focus to govern the growth of their application inventory across the globe.
Invariably, there will be duplicate applications, unnecessary applications that sit on
the shelf, and legacy applications that have run their course and must be retired.
As organizations grow rapidly, demands to respond to market pressures often force
them to act before thinking or analyzing the growth of their business application
needs. The term shadow IT25 refers to business stakeholders acquiring applications
directly from (often cloud) vendors without involving the formal IT channels. With
the emergence of cloud-based applications, it is not uncommon to find business
owners, who control the budgets, acquiring applications without consulting the IT
organization (or doing so after the fact.)
http://en.wikipedia.org/wiki/Shadow_IT
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All applications are not equal. Some applications need to be retired. Others are
mission critical, but the customization and maintenance of these can become
prohibitive and time-consuming for IT. Analyzing quantitatively, while balancing risk
and business value, will help prioritize the transformational road map and quickly
demonstrate the value of low-hanging fruits. In large and global organizations, each
line of business will have its own portfolio of applications. One danger is to conduct
a paralysis-through-analysis exercise to gather the inventory of all the applications.
While eventually all applications need to be rationalized, a better approach is to
quickly identify the most business impactful applications and modernize these first,
expanding the iBPM-driven application modernization inventory over time.
For legacy modernization and transformation through iBPM, there are multiple
dimensions to consider in rationalizing applications and, of paramount
importance, rationalizing the inventory to identify the best candidates for
modernization. To develop a rationalization inventory and prioritize and select
projects for iBPM application modernization, consider the following quantitative
and qualitative measures:
Business Value: How important is the new or modernization candidate
application to the business stakeholders? Some of the generic measures are
increased revenue, controlling or decreasing cost, regulatory compliance
requirements, risk mitigation, and access or security constraints.
In a centralized model, where all decisions are channeled through a core
central IT, there will be conflicts as different line-of-business stakeholders
will have conflicting priorities. Federated agile teams, coupled with corporate
governance and a center of competency approach have proven a far better
methodology for iBPM modernization.
Variability Measure: How frequently will the business logic, business
decisions, business policies, and business procedures change? How
frequently are they changing in existing deployments? As discussed above,
there is a sharp contrast between systems of record that do not change
much and agile innovation, transformation, and agility systems that change
much more rapidly.
Maintainability Measure: How expensive is it to maintain the current legacy
application or custom code? There are many reasons why maintaining
an existing application could be costly or prohibitive. Old, undocumented
code for important applications can become a liability. For packaged
applications, another consideration is the existence or health of the
independent software vendor and their commitment to upgrade or maintain
the application. There are also legacy people who have the knowledge of
the application in their heads. Once these people have left the company or
retired, the knowledge is gone.
Complexity Measure: For wrapping opportunities, how much effort
will it be to integrate with the legacy systems? Integrating with an old
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system or application that does not have a robust and modern application
programming interface could be problematic. There are also other
considerations such as the operating system or platform, language and age
of the application. Transactional consistency, the number and frequency
of interactions, and the overall persistent database structure are other
considerations in the complexity dimensions.
Once the candidates that represent the low-hanging fruit or slivers for modernization
are identified, the journey to modernization through iBPM can proceed as follows:
Phase 0: Modernization Roadmap and Inventory: In this phase, it is important to
identify the quick-win slivers, taking into consideration the dimensions discussed
abovebusiness value, variability, maintainability, and complexity measures.
Phase 1: Phase 0 will yield several candidate projects for modernization and
transformation. These candidates are likely to be projects that wrap existing
legacy or ERP applications. This phase starts showing ROI and true business
value through automating work and cases, while integrating with and leveraging
current incumbent solutions.
Phase 2: This phase starts to tackle modernization projects by replacing custom
code, either in proprietary (e.g. ERP vendor-specific languages) or standard
languages. The custom code attempts to address limitations in the ERP or
packaged solutions.
Phase 3: The last phase is the retirement-and-replacement phase, where legacy
systems that are no longer viable or too expensive to maintain are deprecated
and replaced with iBPM solutions.
The Value of Modernization with iBPM

As we have seen, successful iBPM automation starts with those projects that have
the least amount of risk and the highest visibility for the business. In fact, iBPM
becomes the incremental agility layer for wrapping legacy applications while
leveraging existing systems as needed. iBPM is always driven by business objectives
and provides a holistic perspective on modernization, involving human participants,
human roles, human skills, and organizational structures.
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With the ability to modernize in incremental phases, you can easily change policies,
procedures, flows, dynamic cases, different types of business rules, decisioning
rules, constraints, expressions, and event rules. iBPM uses these policies and
procedures to automate work, while providing multi-channel interactions to internal
operators or customer-facing websites and mobile devices. It provides a context
for social networking and collaboration, and allows organizations to engage in
endto-end dynamic, unstructured, and collaborative cases. iBPM supports activity
monitoring, analytics, business rules, and decision management and provides the
best mechanism for successful SOA initiatives. Its clear that the way to succeed with
your modernization efforts is through iBPM.
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Example: Modernizing for the Future

Vision: A financial groups credit card business has grown its portfolio of accounts by 50%
over the past two years and plans to continue aggressive growth in both domestic and
international markets. Management was convinced that service excellence was the key to
success in this highly commoditized business, but the groups credit card service operation
was not positioned to grow with the business. Day-to-day service fulfillment activities were
inefficient and complicated by the underlying system infrastructure. Legacy systems were
expensive to maintain, and functionality needed to support new card products could not be
developed on those inflexible solutions. The groups client service operation was organized
into many specialized support and fulfillment teams, structured around cumbersome
systems and manual processes required to fulfill customer requests. Delivering excellent
service at the point-of-interaction via one-call resolution was rare as existing processes
did not let agents resolve most customer issues at first contact. In the back-office,
mundane administrative tasks (such as the re-keying of data into various systems,
organizing and shuffling paper documents, etc.) delayed resolution. The time spent on
value-added activities such as case review and selling was limited as skilled analysts were
consumed by administrative tasks.
Execution: The financial group decided to address their legacy infrastructure issues with
a complete system overhaul. iBPM was selected as the technology to provide a full
servicing solution, wrapping around a new core processing platform and automating
processing activity from the call center through to the back
office. Key benefits of the new system would include a 30%
increase in one-touch customer service resolution and a 70%
reduction in average resolution times for requests and
requiring back-office intervention. The deployment would
deliver both an improvement in service excellence as well as
cost savings through streamlined operations.
Results: iBPM provides a 1080, high definition solution to optimize the customer
experience and automate operations for call center staff in Toronto, London, Montreal,
and India. Full account and transaction information is provided on the customer service
representatives desktop. Intent-led service processes enables higher levels of customer
service and one-touch issue resolution. Process automation capabilities are able to
process basic requests straight-through. Issues that cannot be resolved directly at the
call center are automatically routed to central workbaskets used by all back-office dispute
and fraud staff. Smart routing capabilities assign cases to staff from the centralized
workbaskets. Paper-based processing and manual re-keying of data have been eliminated
as electronic case data is routed to the appropriate personnel automatically.
50% of the back office dispute staff was redeployed, and a 95% reduction in IT compliance
cost was realized.
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Real-Time Lean Six Sigma
So far, we have focused on the role of iBPM in the enterprise ecosystem. In Chapter
1, we discussed how the adaptive enterprise evolved from a number of continuous
improvement methodologies, especially Lean Six Sigma, and how iBPM can be a
powerful approach for optimizing business applications. In this chapter, we will
focus on how enterprises can achieve Lean efficiency and Six Sigma effectiveness
through iBPM. Through iBPM- enabled process improvement, enterprises can
keep processes under control, remove waste, and achieve all the Lean/Six Sigma
objectives in real time.
Real-Time Lean
What is Lean? Lean focuses on increasing
process efficiency and reducing waste.
There are three types of work:
Work that is unnecessary waste
as it does not add any value and
must be eliminated.
Value work where the real work
gets done.
Work that is required waste, such as regulatory or legal compliance. It is not
the work, but nevertheless must be done.
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There are two critical measures in Lean: lead time and process efficiency26. Lead time
is defined as:
Lead Time =
Amount of Work in Process

Average Completion Rate
In Lean, the objective is to reduce the lead time. This could be achieved by
either decreasing the numerator (amount of work in process), or increasing the
denominator (speed of process completion).
The other measure, process efficiency is defined as:
Process Efficiency =
Value Add Work

Lead Time
Process efficiency reflects the percentage of actual work being done. Often, in
the end-to-end execution of processes, there is non-value work, such as wasted
efforts switching between green screens, copying and re-copying customer
information (and propagating errors), replication of effort across the enterprise,
waiting for downstream processing, and so forth.
The objectives of reducing lead time and increasing process efficiency could be
achieved if as much waste is eliminated as possible and the work is done at a
greater speed. Lets look at an example that happens every day across the globe. In
a back-office environment, an employee might be going from one office to another,
collecting signatures and shuffling documents. Walking, traveling, or taking the
elevator between office floors does not add value to the work. It is waste. As another
example, in the front-office, a customer service representative might be toggling
between various screens, copying the same information pertaining to a customer
from one screen to another. This too is waste. An example of required waste (though
the members of the discipline might disagree!) is legal work undertaken to ensure
compliance to internal or external regulations. The value work is what really matters,
especially from an internal or external customer perspective. Therefore, in Lean, the
objective is to increase the percentage of value work in the end-to-end processes.
Without a complete iBPM solution automating policies and procedures, a majority
of the work is waste. In fact, with iBPM, most of the waste is eliminated and a lot of
the required waste is reduced. Even the value work is improved through automated,
guided interactions.
See Michael L. George (2003) Lean Six Sigma for Service.
26
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iBPM eliminates waste and improves process efficiency throughout the lifecycle of
business solutions with unique capabilities including:
Directly capturing business requirement.
Automating the work in dynamic cases, with straight-through processing and
guided user interactions.
Continuously monitoring and improving business performance, with complete
visibility and transparency.
At the core of the iBPM continuous improvement lifecycle, there is the enterprise
repository of reusable assets including process flows, different types of business
rules such as decisioning rules, constraints, expressions, event rules, as well as
integration and user interfaces.
Lets look at each of these capabilities in detail.
Operationalizing Business Mandates through Directly Capturing Requirements:
Reducing waste and effort from the point of defining requirements to actual
process automation are very important characteristics of iBPM that directly tie to
Lean. In traditional approaches, for instance, there is a lot of waste when importing,
exporting, and translating between different types of artifacts, from business
mandates all the way to coding. Typically, many different tools are usedword
processing for documents, business analysis tools, enterprise architecture
tools, design tools, and coding tools, to name a few. There is a lot of waste in
translating between the various representations of these tools and keeping them
synchronized. As explained in Chapter 2, with a unified iBPM solution, the waste
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and overhead of going from requirement specifications to analysis, to design, to

coding, and so on, is completely eliminated, bringing tremendous benefits to the
business stakeholders. Furthermore, the waste of translations from imports,
exports, and overall inefficiencies in building business solutions is eliminated.
Automating Case Work: Another area which is extremely important for Lean is work
automation and dynamic case management to eliminate manual work. In the
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before-and-after illustration from Chapter 2, we can see there are many wasted
and error prone tasks: manual searches, manual data entry, and manual application
of policies. This is the as-is state that incurs unnecessary work processing and is
typically slowing the completion of tasks.
In addition to automating the processes in a case hierarchy, iBPM leverages
business rules and decisioning automation to streamline the as-is state. There are
four process optimizations that improve the lead time of processes when automated
through iBPM:
Automation of the tasks
Automation via straight-through processing (obtaining the right just-in-time
information)
Leveraging business rules for automating policies (e.g. eligibility and risk)
Intent-driven and guided interactions to get work done faster
Each of these contribute to improving process efficiency, enabling a higher
percentage of value-add work and substantially reducing lead times. For tasks that
require human participants, iBPM provides guided and purposeful interactions.
Sometimes, manual tasks can be completely eliminated through rules and straightthrough processing. The decisioning, the availability of the resource, and the skills of
the resource are taken into consideration to eliminate waste.
With iBPM, the tasks are automated in the context of dynamic cases. As we shall see
in Chapter 9, a case is the organization, coordination, and dynamic collaboration of
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multiple tasks for a business objective. Cases must be dynamic as new tasks can
be added dynamically, and cases may also need to respond to and generate events.
With dynamic case management, knowledge workers can also collaborate and
participate in the resolution of cases, especially those involving complex exceptions
and knowledge work. This means time does not have to be wasted by unnecessarily
involving subject matter experts, and the speed of resolving cases is accelerated.
Business Activity Monitoring: As cases are executing, rather than chasing various
types of databases, spreadsheets, e-mails, and other forms of communication
to determine a measure of the performance for the cases, iBPM provides business
activity monitoring (BAM) capabilities. All the waste incurred in chasing data and
information for performance measurement is eliminated because iBPM keeps track
of the various activities and presents them to the business users in meaningful,
actionableand real-timereports.
Enterprise Repository for Reuse and Specialization: The traditional approach
of copying or replicating assets between multiple applications is wasteful and
inefficient. At its core, iBPM provides a dynamic, multi-dimensional enterprise
repository which keeps track of all the assets, specializes them, and organizes them
across many dimensions. This means that new processes, new rules, or new cases
are easily added. With iBPM, various types of applications with contextual, situational
information are all maintained in the enterprise repository. This provides tremendous
benefits to process efficiency and realizes the potential of real-time Lean as the
enterprise repository optimizes reuse and supports specialization to eliminate waste
when building new applications or evolving existing ones.
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Real-Time Six Sigma
Lean looks internally at front-, mid-, or back-office processes and attempts to get
rid of the waste and improve efficiency. How about Six Sigma? As mentioned, Six
Sigma is a complimentary methodology which focuses outside-in on the voice of
the customer. Lean focuses on reducing waste and improving process efficiency. Six
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Sigma attempts to improve quality and reduce variation. In fact, Six Sigma has a very
specific statistically quantitative objective, where the process is kept under control
for its critical-to-quality measure (CTQ). This measure should not exceed upper or
lower limitsthe control of the process. The CTQ is a specific business measure that
defines the objective of the Six Sigma initiative. It could be a measure of unit, time,
dollar amount, or just about anything that is measurable and associated with the
process being improved. The quantification for keeping the processes under control
is keeping them within plus or minus three standard deviations, 99.9996% of the
time. There are many methodologies that are associated with Six Sigma. The most
popular of these is DMAIC: Define, Measure, Analyze, Improve, and Control.
Traditional Six Sigma projects tend to be very long in duration, big bang, and
complex. Each of the phases and steps in DMAIC or other Six Sigma methodologies
has many deliverables. The Mmeasureis perhaps the most challenging phase
as the data can have quality issues, the sources of the data are many and dispersed,
and the aggregation of the data is difficult, to name a few.
With Six Sigma, the objectives of improving quality and reducing variation could be
achieved if the CTQ measures are mapped onto properties, or states of the cases or
processes that are automated in the iBPM solution. This enables the iBPM solution
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to watch and make sure the processes are under control. iBPM can potentially
escalate or take proactive steps when process CTQs exceed or fall below the upper
and lower limits. These define the control perimeters of the process. The iBPM
system keeps processes under control, in real time. Contrast this to traditional Six
Sigma, where data needs to be collected, analyzed, and then the processes need to
be fixed after the fact.
A CTQ (also identified as big Y) can also depend upon other properties (big Xs) all
managed by iBPM cases. So, all the phases in the continuous improvement lifecycle
of iBPM come into play to achieve the objectives of Six Sigma methodologies, such
as DMAIC, in real time. In fact, many organizations achieve the objectives of Six
Sigma without going through all of the detailed steps and phases of DMAIC or other
Six Sigma methodologies. This does not mean that the rigor of these Six Sigma
methodologies must be abandoned. It does mean, however, that the best and fastest
way to achieve Six Sigma objectives is to introduce iBPM in all phases of the Six
Sigma (and Lean) methodology.
The CTQ or big Y measure itself could depend on other measures that contribute
to its value (big Xs, small ys and small xs). These correspond to the internal
capabilities that contribute to the overall CTQ of the end-to-end process. For
example the CTQ could correspond to overall Net Promoter Score improvement
with a specific reduction in detractors or improvement in promoters or both. Once
captured and represented as a measure (Y), it can depend upon several layers or
values that influence it:
The call center hold time, which itself needs to be controlled, such as not
exceeding the prescribed amount of 30 seconds, 99.99996% of the time
The quality of the next best offer and its acceptance rate
The on-line banking access time
The branch waiting time
The point is that each of these measures (the small ys) contribute to the overall
objective (the CTQ or big Y) and need to be in control. In traditional Six Sigma
improvement, there are many complex phases, and the process is improved most
often after the fact by measuring and analyzing the historical data, often from
multiple sources.
When the process is executed using iBPM, the big Ys as well as big Xs, small ys
and small xs are all identified as properties of automated cases and processes.
The relationships between these measures are captured in declarative expressions,
business rules and constructs of iBPM. This allows the process improvement experts
to directly capture and represent expressions and relationships between variables/
properties (e.g., a big Y is a function of a big X). Similarly, small ys (big Xs) can
be expressed in terms of small xs. More importantly, since iBPM provides an
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automation and execution environment, the iBPMs engine can monitor these values
and readily take action or escalate if any of the measures exceed their prescribed
upper or lower limits, or are in danger of doing so. For instance, if the time it takes
to process a call or a claim starts to get into the red zone (service level violation),
iBPM can execute temporal event rules to immediately alarm and notify the case
worker or her/his manager. It can even automatically execute event handling rules to
keep the process in control.
Therefore the benefits of real-time Six Sigma (i.e. Six Sigma process improvement
through iBPM automation) can be summarized as follows:
Holistic Modeling and Automation: iBPM allows users to model and deploy Six
Sigma processes holistically and cohesively, including properties, process flows,
cases that potentially span multiple teams, decision rules, expressions, event
rules, service levels, system integration, and user interfaces.
Directly Capturing CTQs: Y, X, y, x: Process improvement experts can have
properties depend on other properties through several levels of dependency,
which provides a framework for managing multiple levels of xs and ys. The
calculation and propagation of property values is automatic. Several types of
decision rules are used to support the business logic that keeps the processes in
control. Analyticspredictive or adaptivecan also be leveraged for the overall
optimization of the processes, providing for instance the Next-Best-Action for
the customer, and improving the CTQ measures that influence the customers
Net Promoter Score.
Real-Time Monitoring and Response: Multiple types of event rules, including
constraint violation, temporal events (such as service levels), changes in the state
of cases, and so forth can trigger easily specified actions to keep the processes
in control and make sure CTQ boundaries are not violated. Constraint rules
and conditions can be used to monitor performance against upper and lower
specification limits and take appropriate action when limits are exceeded. Service
level rules allow users to specify various temporal limits, such as goal and
deadline, and take appropriate action when a limit is exceeded. If property values
that represent ys fall outside prescribed boundaries (called Lower Specification
Limits and Upper Specific Limits27), the iBPM application can automatically act on
those exceptions with the appropriate response.
Ease of Specialization: As new processes and situations are discovered in the
Six Sigma analysis, the project team can easily modify and specialize existing
processes, rules, and other elements of the iBPM application. As noted earlier,
by leveraging the dynamic multi-dimensional repository of the process assets,
the intelligent iBPM engine can apply the right constraint for the CTQ measures
depending upon the circumstance, for instance treating different customers
Wikipedia (2013). Six Sigma. Last Modified August 28, 2013. http://en.wikipedia.org/wiki/
Six_Sigma
27
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differently, depending upon their level (silver, gold, platinum), their history, the
geographical location and the type of service or interaction. All these can be
taken into consideration to apply the most specific, customized, and specialized
constraints for a particular situation.
Real-Time Lean Six Sigma

iBPM allows process improvement projects to achieve real-time efficiencies (RealTime Lean) through real-time effectiveness (voice of the customer Real-Time Six
Sigma). Now, there is a robust relationship between Lean and Six Sigma. It has
been shown, practically and analytically, that the more we get rid of non-value
(or waste) work, the faster we can achieve the Six Sigma objectives. This makes
sense intuitively, and the analytical data backs it up. In other words, as we get rid
of the waste in processes and improve their efficiency, we will be able to achieve
the objectives of Six Sigma (CTQ process measures within specification limits
99.9996% of the time), much faster. With iBPM, process improvement projects can
focus on value chains to reduce and eliminate waste in all the phases of the agile,
iterative, and continuous improvement lifecycle of iBPM projects. As waste is
eliminated, the process reduces variance and improves its quality. In other words,
through iBPM Lean accelerates reaching Six Sigma objectives and keeping the
process CTQs in control.
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Example: Lean Six Sigma and Global Contract Manufacturing

Vision: A global contract manufacturing provider faced the task of producing a wide
assortment of products for its distinctively unique global customer base. It provides
manufacturing in different domains such as defense, aerospace, life sciences, with tens of
plants globally. The supply chain for each customer is different and requires certain
guidelines and processes to be followed. Demand volatility for the manufacturing services
provider was also a challenge. Customer orders rarely went unchanged, and any changes
to orders caused waste. Operating at such a large and unpredictable capacity, the company
needed to identify problems in real time. Work cases typically travel through a series of
hierarchical escalations before they are resolved. These escalations needed to happen
faster and more efficiently.
Solution: The manufacturing provider adopted
a Lean deployment strategy. Its strategy was the
centerpiece of its operating system portal which
is where work gets done. The iBPM-developed
portal easily enables knowledge workers to
initiate, progress, and share case work. iBPM
gathers process metrics automatically, which
can then be visually analyzed through business
activity monitoring capabilities. These reports
allow the manufacturing provider to identify
where there is waste and eliminate it, all in real
time. From there, best practice processes are continuously replicated across the company.
Smart automation eliminates unnecessary manual steps to hasten escalations so that
case work is completed faster.
Results: The global contract manufacturing provider realized several hundreds of
millions in savings due to its Lean strategies. It is reaching its Lean and Six Sigma strategy
objectives faster and has given the customer a voice. Productivity has grown significantly
with hundreds of thousands of work cases closed annually. Lastly, as the contract global
manufacturing provider continues to rapidly grow, it can scale its strategy and continue to
monitor and respond to change through iBPM and their Lean/Six Sigma methodologies.
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CHAPTER 9
Dynamic Case Management
This chapter focuses on a very important capability within iBPM: The ability to
manage processes and collaborative tasks holistically to realize business
objectivescalled dynamic case management. Here are some of the pain points
with which business stakeholders struggle:
How can our many applications work together?
How can we be more flexible? Why do changes
take such a long time?
Why is it so difficult for me to have complete
end-to-end visibility into my operations?
Why do processes have to be so structured?
Why cant I do unplanned work?
How can we easily innovate and collaborate
about new ideas?
How can we easily coordinate multiple work
streams, content, workers, and solutions?
Why do we have so much manual processing
that is slow and are error prone?
Why am I not able to have a case across my
business units?
Why Do Organizations Need Dynamic Case Management?

Dynamic case management addresses the questions above and much more. In
real-life business applications, what is being executed are actually cases,
not individual or siloed process flows. The value proposition of dynamic case
management can be summarized as follows:
Dynamic yet Organized Automation: Usually a case involving multiple workers,
multiple departments, multiple applications and content is partially automated.
Some work streams will be done via e-mails, others via departmental workflows,
others managed via spreadsheets, and still others via green screen legacy
solutions. With dynamic case management, you can have one solution that
automates and coordinates all the tasks. The organization of the tasks involves
subcases, each of which targets a specific objective contributing to the overall
business goal of the case.
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Holistic and Cross-Departmental: Another very important advantage of

dynamic case management is to support end-to-end holistic processes involving
many departments. In an overall value and supply chain, each department and
team can focus on a subcase contributing to the overall objective of the parent
case. Modeling and executing this with the rigidity of flowcharts and swim
lanes will be very difficult.
Social and Collaborative: All the social iBPM advantages that were discussed
in Chapter 6 can be leveraged in the context of dynamic cases. Case workers
and managers can leverage discussion streams, synchronous exchanges or
chats, knowledge wikis, opinion blogs, targeted tweetsall within the context
of the dynamic case and its objectives. Thus with this (somewhat ad-hoc and
flexible) social collaboration, the case stays alive and continuously improves with
innovative idea exchanges.
Agility and Flexibility: A very important reason why organizations need dynamic
case management automation is flexibility to manage improvements for reduced
cost, reduced risk, and increased efficiencies. This agility means some tasks
are planned and others are unplanned. Workers and managers can dynamically
add ad-hoc tasks and even discover the need for new processes in the context
of an individual case. This flexibility also includes supporting variations in work,
smarter work processing, and social collaboration to achieve business objectives.
Handling Exceptions and Design-by-Doing: Exceptions happen. In traditional
iBPM approaches, the exceptions are handled outside the scope of the solution,
and via different streams such as e-mails, meetings, ad-hoc exchanges, etc.
As noted above, the agility and flexibility of dynamic case management allows
exceptions to be handled in the context of a casenaturally and seamlessly.
Furthermore, as ad-hoc and unplanned tasks, as well as subcases or process
fragments are added to a single case, they can be used to update or create a new
case template so that subsequent cases can benefit from the way the exception
was handled. Workers take action (e.g. add ad-hoc tasks), and then these are
used as the basis of improved design, which is design-by-doing.28
Engaging Knowledge Workers:29 These are the cognitive workers, the subject
matter experts and often the authors of policies and procedures. Traditionally
they are siloed and do not engage in operational processes. That is changing
with dynamic case management, and this very important category of workers is
becoming increasingly more engaged in operationalized cases, especially with
the seamless integration of social networking and collaborative capabilities
within the case.
Empowering Knowledge-Assisted Workers with Guided and Intent-Driven
Interactions: An even more important category of workers who are supported
through dynamic case management are the knowledge-assisted workers.30 This
Creating case templates from best practice case instances.
For more details on knowledge workers see: Davenport, Thomas H. (2005). Thinking for a
Living. Boston, MA: Harvard Business School Press.
30
For more details see: http://pega.com/community/pega-blog/knowledge-assisted-workers
28
29
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most common category of worker leverages the decisioning, business rules,

and situational/contextual execution of interactions in particular to help them
complete their specific, contextual work within the case hierarchy.
What is a Case?
A case is the coordination and collaboration of multiple parties or participants that

process different tasks for a specific business objective. The coordination of the
tasks is organized in a case hierarchy (subcases). Cases will always have a subject
which is often a human such as a customer, patient, or recipient of welfare. A
case, however, can be almost anything, such as a claim. The case will also have a
business objective pertaining to the case subject. There will be a lot of collaboration
between various case workers to resolve the case. While processing these tasks,
a case will have content, often from multiple enterprise information systems or
content management repositories.
Some of the tasks will be planned in predetermined process flows, and some tasks
will be unplanned. All of these coordinating tasks in the case are for a concrete
business objective or goal. Cases are therefore dynamic, adding or changing any of
their elements, and responding to and generating events.
In fact, if we were to look at the anatomy of a typical case, as illustrated here, the
case will have a hierarchy. It will have subcases, and various tasks will be executed in
the context of the parent case or one of its subcases.
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Cases generate and respond to business events. Sometimes, events need to be

correlated. Workers can subscribe to events and be notified on the occurrence of
simple or complex correlated events. Cases will have service levels. There will be
different types of policies and business rules, such as decisioning rules, expressions,
decision tables, and constraints, which are associated with the case. Cases have
multiple process fragments executing in the context of the case hierarchy.
Cases will go through milestones or stages. Business will have complete visibility
into these milestones and can easily monitor the progression of the cases lifecycle
towards resolution.
Structured Flow versus Dynamic Case
If we look at traditional iBPM, it tends to be structured and the process steps tend
to be predetermined. The swim lane is perhaps the most ubiquitous representation
of traditional production processes, where each of the lanes indicates a participant
or a party. The most important aspect is that the sequencing of the tasks is rigid and
predetermined. The swimlane is not the right container for real world processes.
These involve social collaboration, related cases, and ad-hoc tasks. It boxes in and
limits what could be done with process automation. It is a partial fragment of
end-to-end dynamic and collaborative real-life processes. The exciting tasks, events,
collaboration and other work streams happen outside the limitations of the flow
chart, or traditional BPM implementation.
Dynamic case management can handle these structured processes, but can also
handle robust hierarchies of tasks and collaborative processes with ad-hoc changes.
In the following illustration, you see the folder paradigm depicting the case. It has
business objectives, subjects, and case workers. It also involves various business
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rules or policies, as well as process fragments. You can also see a number of
enterprise information or content management repositories providing content
or data to the case. As the case progresses, there could be additional subcases,
process fragments, tasks, sources of information, or content that becomes
associated with the dynamic case. The key point is that adding policies, procedures,
content, structure, and responding to events could all be done dynamically.
As noted, when we think about iBPM, we sometimes visualize the swim lane
representation of a process. There are events in the process map, and the ubiquitous
diamond shape represents decision branching. This is what some people think of
when you say business process management. The problem is that tasks and their
sequencing are predetermined ahead of time. When designing the process, you need
to have thought about all of the branches you have, all the tasks, events, sequencing,
and so on, which is pretty much an impossible task. In real life, one needs to be
able to handle structured predetermined processes, as well as unstructured and
collaborative ad-hoc tasks within dynamic cases.
Lets look at an example of dynamic case management where you might be executing
one of these swim lane process diagrams. You initially start with a business objective,
a case subject, case workers, and a number of document management or ERP
systems that are feeding data to the case. There are business rules or policies that are
driving the case towards completion. Then, dynamically, and without any prediction
ahead of time, you might create a subcase with a different subject. You might execute
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a different unstructured process fragment. You might have several of these changes
with additional accesses to enterprise content, repositories or other enterprise
systems, as well as execute additional tasks. The point is that, yes, you are executing
tasks in the context of process flow fragments, but there is an additional dimension
of holistic, collaborative, and ad-hoc work. You are able to handle exceptions, include
other tasks, and manage dynamic events, all in the context of the aggregate case.
Dynamic Case Management with Knowledge Workers
The two dimensions illustrated here, representing the type of case worker and
the spectrum of work from structured to dynamic case, capture the scope of case
management. The spectrum of workers begins with clerical or manufacturing
workers. In this domain, you know exactly what needs to be done and every
task can be predefined and predetermined because workers in this domain
tend to have well-defined, structured work. At the other end of the spectrum is
the knowledge worker. Knowledge workers are the experts. They are cognitive
workers. They innovate and often come up with the policies and procedures in
the organization. They can react on the spot, knowing what to do in a particular,
exceptional situation. Between these two, you have the most important category
that represents the majority of workers, the knowledge-assisted workers. The
knowledge-assisted worker falls somewhere between the clerical worker and
knowledge worker. Knowledge-assisted workers need to apply policies and
procedures in the work that they are trying to complete. They are not creating the
rules, but they must apply the rules, often situationally or contextually. Customer
service representatives are a good example of knowledge-assisted workers. They
are usually trained so that when they interact with a customer, they know what to
do within the context of the specific situation.
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In addition to these types of workers, there is also a spectrum of work in dynamic

cases. The spectrum spans short duration production workflow to dynamic
cases. (Collaborative, adaptive, and unstructured are other adjectives often
associated with this more flexible type of work processing.) Dynamic cases
tend to be longer in duration and more collaborative than structured, predetermined
workflows. You want to automate this type of collaborative work to provide
guidance to the knowledge and knowledge-assisted workers. You want to be able
to dynamically discover processes, modify policies, change the hierarchy in the
case, add or change tasks in the case, and add or modify content or any other aspect
of the case. You want to be notified and respond to business events. You want to
have a holistic view of the tasks originated in hierarchies. You want to support
collaboration, as well as the coordination of the tasks to meet a business objective.
So, dynamic case management becomes critical, especially for knowledge workers
and knowledge-assisted workers.31
The key point is that iBPM is able to handle the entire spectrum of structured,
semi-structured, as well as unstructured case processing that sometimes tends
to be longer in duration. The lines between these types of work are actually blurry.
iBPM solutions supporting dynamic case management are able to support the
case spectrum and more importantly, move from one to the other very easily. You
might, for instance, start with a traditional production workflow and end up with a
much more collaborative and unstructured case.
Dynamic Context
One important aspect of dynamic case applications is the context of the case. The
dynamic enterprise repository contains the core iBPM assets. What are these
assets? These are the case types, process fragments, integration with various backend enterprise content management or legacy systems, as well as the different
business rules such as decision trees, decision tables, analytics, expressions,
constraints, event rules, and also the various forms of Web and mobile interactions.
These assets are needed in business applications to process dynamic cases. The
assets are organized along multiple dimensions that represent the business intent,
such as the type of product or service you are offering, the level of the customer (e.g.
Gold, Silver, Bronze), and the jurisdiction or location of the interaction. The specific
values for these dimensions constitute the context of the case.
Depending on the type of the product or service, type of customer, or location of the
case, the underlying iBPMS engine picks the most appropriate process fragment,
data source, business rule, or form for the case worker or the case subject if you
have a self-service interaction. Instead of worrying about what discount to provide
It should be noted that knowledge workers and knowledge-assisted workers also use structured work in, for instance, their procurement applications or different types of HR applications.
31
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a customer at a specific level, the iBPMS application picks the discount rule and
executes it automatically. In other words, the case is aware of the context of that
particular interaction and executes the appropriate iBPM asset accordingly.
Dynamic Case Lifecycle

Cases have a lifecycle. When a case gets created, it is opened and different types of
case workers, such as knowledge workers, knowledge-assisted workers, and clerical
workers process the case. Often they work on various tasks in parallel. There could
be ad-hoc changes, such as creating subcases, adding tasks, running additional
unstructured processes, or adding content.
At some point, the case is resolved. Ideally, you would like to complete the case
and say that the case is closed. Sometimes, a new case is rejected or is recognized
as a duplicate. In any of these situations, the case is considered resolved. In some
situations, the case needs to be reopened, taking it back to the open case state.
When the case is reopened, all of the documents, the case data, and the status of
various tasks and processes are all available to the reopened case.
Dynamic Case Management for all Industries
As we have discussed, dynamic case management supports all types of case

workers and case processing. There are many industries that deal with cases,
whether it is credit card disputes in card services, exceptions handling and fraud
investigations in corporate banking, customer service requests in retailing, disease
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management in healthcare, welfare management in the government, or claims

management in insurance. All of the characteristics that we have mentioned
earlier for handling structured and unstructured cases or the ability to add tasks
dynamically, manifest themselves in these types of industry applications.
Lets look at a specific example of a case for automobile warranty claims processing.
In this example, there are two business objectives for the dynamic case management
solution to manage warranty claims:
Increase the number of satisfied customers by increasing promoters
(following Net Promoter Score methodology) by 20%.
Reduce overall claims processing by 30%.
As illustrated, the subject of the case is the Claim. The super-case is the Auto case.
It has three sub-cases: Tire Damage, Oil Change, and Anti-lock Braking System
Fault. There are tasks executing for the objectives and completion of each of these
subcases. For instance, returning parts is a task that is part of the Repair Fault
sub-case within the ABS Fault sub-case. Each of the sub-cases will execute one or
more process fragments. Tasks are assigned within processes. So there will be a
process flow for verifying parts return, and tasks such as Pay Dealer are executed at
a specific step within that flow (process fragment).
Sometimes tasks are not predetermined or planned. In the context of a particular

sub-case, the case worker might need an ad-hoc or unplanned task. Both planned
tasks that are associated with a step in a process fragment and unplanned tasks are
supported in dynamic cases.
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Dynamic case management is an important feature of iBPM. As illustrated here,

what drives the case and its sub-cases to completion are the various business rules,
decisioning, event rules, integration and guided user interactions which make up
the intelligent neurons and the nervous system of the case.
Note that since this is an iBPM approach, all these capabilitiesbusiness rules
engine, analytics for decisioning, event correlation, etc.are part of the unified
platform. Rules and decisioning control and drive the case to completion.
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Example: Taking Off with Dynamic Case Management

Vision: An air transport company that operates one of the busiest airports in the
United Kingdom wanted to deliver a refined service to its 65 million annual travelers. As
complicated as airport operations are, the 75,000 employees divided into air, tower, and
ground teams are dedicated to providing an easy and comfortable flying experience for
their customers. To do this, the air transport company wanted to increase its overall
operational efficiency, have a consistent view of flight status across all stakeholders, and
grow collaborative decision making among its employees.
Solution: The air transport organization used iBPM as a backbone for its European
Airport-Collaborative Decision Management initiative. iBPM enhances the decision making
process by seamlessly integrating with existing operating systems and automatically acting
on data in real time. Within the system, each aircraft turnaround is handled as a case, and
in order for case work to be completed, the system drives collaboration between a number
of human participants (such as flight crew managers, refueling and cleaning crews) and
systems (such as air traffic control). iBPM automates key airport processes using rules
specialized to each circumstance. For example, the system schedules departures and
arrivals to minimize the time each aircraft spends on the ground, stationary or taxiing. In
response to abnormal scenarios, such as weather delays or a terrorism alert, it downloads
the rules sets that the company has designed to manage the new situation and invokes
a new resource plan. It intelligently routes work and data to the right knowledge worker.
Results: The implementation of iBPM raised the on-time departure rate from 68% to
85%. The air transport company operates at a 98% runway capacity so that more flights
with more happy passengers can take off more frequently on time. Due to the operational
efficiency, the company pays fewer penalties, has reduced its environmental impact,
and schedules and uses expensive resources more accurately while providing a safe,
comfortable flying experience for all of its customers.
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CHAPTER 10
iBPM Agile Methodology
The fact of the matter is that an iBPM is great raw material. To make it successful,
you need a complimentary development methodology. In Chapter 3, we focused
on success factors for iBPM. We mentioned specifically iBPM methodologies and
COEs. The previous chapters also elaborated on additional advanced capabilities
for iBPM including iBPM and Business Rules as well as Analytics (Chapter 4),
iBPM and SOA (Chapter 5), Social and Mobile iBPM (Chapter 6) and Dynamic Case
Management (Chapter 9). We also discussed how iBPM can serve as a great enabler
for improvement, transformation and modernization of enterprisesChapter 7 on
Legacy Modernization and Chapter 8 on Real-Time Lean Six Sigma.
Agile methodology focuses on the science and art of how to build agile solutions
using iBPM. It helps the various roles and participants building the iBPM solution
with a precise implementation approach that specifies:

Phases and iterations

Roles and responsibilities
Step-by-step tasks and iterations
Milestones
Deliverables of the iterations/phases
Overall governance from the requirements to the deployment of the
iBPM solution.
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The methodology also provides the blueprint and overall management of the project
for the iBPM implementation. As illustrated here, the iBPM methodology is an
important and essential cornerstone of the COE, the lingua-franca and dynamics
of communication between business and IT, the governance of the change that
is always constant, and the continuous optimization and improvement of process
solutions. An iBPM project succeeds or fails in relation to the methodology adoption
and governance.
Five Principles of iBPM Methodologies

In order to implement a successful methodology, there are five core principals and
requirements that must be met including:
Realizing quick wins through the methodology

Understanding the iBPM paradigm for the enterprise
Grasping how iBPM methodology can leverage the iBPM platform
Recognizing agility and iterations in the iBPM methodology
Building corporate iBPM assets through the iBPM methodology
Quick Wins
The methodology starts with the business case and identifies a best-choice
opportunity (quick win or low-hanging fruit). The earliest phases of the methodology
need to identify a business case and then define the best-choice (what to implement
first) opportunity to guarantee the success of the iBPM deployment.
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There are several factors that make up the business case. Higher level
motivations include:
Innovation: Ability to create and quickly introduce new products and services.
Innovation can also impact new approaches for existing processes.
Growth: Related to innovation is a focus on growing revenue as well as the
market share of the business.
Cost Control: With the economic downturn of recent years, organizations are
increasingly looking for solutions to control cost and do more with less.
Productivity: As enterprises attempt to control costs and grow, the directive
to increase employee productivity becomes essential. Productivity also spans
customers, trading partners, and other serviced communities.
Compliance: A substantial percentage of IT and business resources are spent
dealing with compliance issues.
Careful analysis and quantitative and qualitative ROI are critical in this initial
business case phase. Once a business opportunity is identified, there are often
many use cases that could potentially be digitized and automated. The iBPM
project leader needs to decide where to start and which of the candidate use
cases should be deployed first. This choice is critical for the overall success of
iBPM projects. If the wrong decision is made early on, a project may run longer
and cost much more than the initial estimates. Identifying and agreeing upon
which use case to automate first is an important success factor that business
and IT need to agree upon in the initial phases of the iBPM project. One proven
approach is to choose a quantitative strategy that attempts to discover the use
case with the least effort and highest business value.
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We have seen this illustration in Chapter 7 on legacy modernization. As you go to

the right on the x-axis, you have less risk and less complexity. As you go up the
y-axis, you have higher and higher business value and visibility. Each of the circles
represents a potential iBPM project for automation. We should re-emphasize our
Think big, but start small strategy here with a focus on the quick win to really
demonstrate the value proposition of iBPM. Mostly likely, your best choices for a
quick win are the projects in the upper right corner, such as account opening in
our example here. There are other projects for consideration as well, like claims
processing, though the business visibility is slightly less and the risk somewhat
higher. Another potential project is the time-off request which has the least amount
of risk because it is a relatively simple application, but does not provide great
business value or visibility. The quick-win opportunities could be identified through:

Brainstorming sessions with stakeholders

Quick-win calculator
Automated iBPM quick-win project selector, and
A combination of these methods
The New iBPM Paradigm

iBPM is a new paradigm and a new way of thinking about solutions deployed
across the extended enterprise. There are principles that are common with any
good software development lifecycle (SLDC) and agile methodologies such as
Scrum.32 These approaches have phases, workflows, sprints, roles, and artifacts
that are adjustable and applicable to iBPM. In iBPM, you are trying to elevate
the programming paradigm so that processes and business rules are captured,
represented, and implemented directly. Furthermore, the main drivers in iBPM
are participants that have new and emerging roles such as business analysts and
process architects.
https://www.scrum.org/
32
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Capturing and implementing change in iBPM iteratively is quite different from

waterfall conventional programming methodologies which typically:
1.
2.
3.
4.
Complete a detailed requirement/functional specification phase, then

Complete the design phase, then
Spend an inordinate amount of time building it, and then
Deploy it, potentially conducting acceptance testing, towards the end.
Typically what happens in Step 4 is that the business stakeholders can quickly
introduce additional changes or indicate what has been built is not what they asked
for or wanted.
With iBPM, you have continuous communication with the stakeholders and can
incrementally test and deploy an iBPM solution in collaboration with those business
stakeholders. Furthermore, ideally the business stakeholders are part of the team
building the solution. As we have discussed, this is possible because iBPM provides
constructs and solutions that the business understands and can change. iBPM
assets such as processes, different types of business rules and even the UI can be
communicated via readily and easily understandable forms that provide a common
language between business and IT. In some scenarios, business participants can
introduce new process flows or rules directly in the deployed iBPM solutions. These
business participant roles are different from the more technically-oriented architect
and development roles with different competencies, talents, capabilities and
responsibilities that need to be captured and reflected in the methodology. With iBPM
agile methodologies, conventional software development walls, roles and challenges
are obliterated in favor of model-driven development. Modeling can and needs to
quickly move onto automation and execution with as little mapping or switching of
tools as possible, and with none being the best option.
The iBPM Platform

For a successful iBPM project, an iBPM execution platform is needed. The agile
methodology should reflect and leverage the iBPM platform that will be executing
the business processes, decisions, and business rules. The iBPM platform supports
the iterations as you are building the iBPM solution.
For example, in Scrum you will have a prioritized product backloga list of business
and technical features that need to be implemented. Each of these is mapped onto
iBPM elements, such as business rules for risk, approval cases, integration with
bug fixer, etc. Ideally the Scrum team includes members from business, IT, and
operations who are proficient in iBPM. With agile iterations in each sprint or even
daily Scrum, the stakeholdersespecially the businesshave direct visibility and
access to the solution that is being built. Even the decision when to ship or consider
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a solution productized can be adjusted. Ideally the iBPM Scrum methodology should
use the terminology, roles, portals, and meta-models of the target iBPM platform.
There are other ways in which the iBPM platform and methodology support
each other:
Best Practice Pre-Flight (Deployment) Analysis: The iBPM platform can
capture best practices as specified in the methodology and conduct a preflight analysis to check if the best practices are reflected in the solution
that is about to be deployed. This analysis can also identify and warn about
potential areas of conflicts or problems, again reflecting the methodologys
recommendations.
Change Requests Process: Improvement and change requests are also
processes. iBPM can support processes to directly capture and automate
incremental change requests, in other words, processes for process
improvements. This meshes improvement with development. It allows
various stakeholders to readily instantiate improvement and change
requests, involving the details of the request in the context of the business
application being built.
Agile and Iterative

Agility is paramount. The methodology should help you continuously monitor and
measure your improvements, as we discussed in regards to real-time Lean Six
Sigma in Chapter 8. Before starting an iBPM sliver project, there needs to be a clear
understanding of its purpose or return, which is then continuously measured and
monitored once the solution is deployed. Iterations can subsequently address the
return objectives, such as the Lean goal of getting rid of additional waste or the Six
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Sigma goal of improving quality and reducing variance. In other words, the deployed
iBPM solution is continuously measured and improved to achieve the business
objectives that drove its implementation. There are three types of iterations in the
agile iBPM methodology:
1. First, the slivers which iteratively automate additional products, services or

problem domains and solutions. You identify the number of slivers by starting
with the low-hanging fruit (the quick win), but there are other projects as well
in your backlog of iBPM solutions.
2. Second, as described above, you have the iterations of the Scrum methodology:
daily Scrum meetings and sprints. This iteration occurs during the construction,
design, building and deployment of the iBPM solutions. The essential element
here is to quickly demonstrate results through the iterations, and provide
immediate visibility to all stakeholders.
3. Third, after deployment there are also post-deployment iterations. These postdeployment iterations and delta improvements ensure that the critical-to-quality
measures and processes are in control. The ROI is continuously monitored to
ensure the solution is on target. Occasionally, you introduce delta enhancements
and corrections which are incremental improvements (small dot versions) to
the iBPM solution.
Build Reusable and Situational Corporate Assets

iBPM is strategic and ideally should be deployed for enterprise-scale
transformations. Organizations should be able to reuse the solutions they are
building and easily specialize each solution for different lines of businesses or
geographical areas. As we discussed in Chapter 8 and elsewhere, the core of
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the continuous improvement lifecycle of iBPM is the dynamic repository of the

corporate assets. This brings us to our last principle for iBPM methodology, which
is that it should encourage you to build assets in a dynamic multi-dimensional
repository including process flows, case types, business rules, decision management
strategies, business events, service integration and the UI elements for browsers,
social networks, and mobile devices.
It is important to be able to organize these corporate assets along a number of
dimensions. The methodology needs to help you specialize, extend, or expand
them incrementally. For instance, you might have many of your business processes
and declarative rules that deal with risk management shared across many iBPM
solutions. Risk calculation, risk mitigation, exception handling for risk management
can be shared throughout an organization for different purposes. You also should
have the flexibility to specialize and apply the most appropriate risk rule for specific
situations or circumstances. The methodology should be able to leverage the
capabilities of the iBPMS to create these assets in an organized fashion, provide
support for reusability and also specialize when needed for situational execution.
The graphic illustrates the organization of the iBPM assets in reusable layers, each
of which contains flows, case types, different types of business rules, decisions,
properties, UI, reports, integration, etc. These are the elements that make up
executable iBPM solutions. The foundation is the iBPM suite, on top of which you
can have multiple layers, reflecting various dimensions that organize the assets.
As you move up the layers, you have additional specializations. Layers above reuse
(or inherit to use a technical, object-oriented term) all of the assets of the layers
below. So, typically you start with an enterprise layer that contains the shared
assets for the enterprise. You then specialize with additional layers for different
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lines of business, organizing them through geographical location, type of product,

or category of customer. At run-time the underlying iBPM engine will pick the best
asset to apply for the given values of the dimensions. This is the essence of iterative
excellence, such as applying a discount rule dynamically based on the type of
product, customer category, and location.
In other words, the methodology should be corporate asset-building aware. It takes
discipline and governance to develop more enterprise-level solutions as opposed to
simply building a sliver for a specific problem or objective.
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Example: Agile Methodology in Insurance

Vision: An insurance company that insures one million commercial clients and is
consistently ranked as a Top 5 carrier by North American property and casualty agents
had been focused on expensive business transformation efforts in recent years. The
company increased outsourcing and in-sourcing of work to lower cost structures. While
these cost savings efforts were successful, they created some unexpected customer
service challenges. This new service model created a lot of manual hand-offs, impacted
transaction accuracy and elongated customer service cycle time.
Solution: In order to realize its strategic vision, the insurance company focused on a new
sprint methodology and used an iterative approach to validate improvement assumptions
with business stakeholders before implementation. The company empowered the business
to collaborate with their IT counterparts by leveraging iBPMs ability to directly capture
business objectives in working application models. This created greater alignment around
business challenges and enhanced the companys process redesign improvement
opportunities. During this process, the company discovered opportunities to dramatically
improve intake across 22 service
centers by using intelligent work
routing to assign work to the right
person and dynamic case
management to streamline the policy
servicing process.
Results: The insurance company has dramatically reduced service cycle times by
deploying a single iBPM solution that provides transparency across channels and manages
all customer interactions and history. The company increased first-contact resolution
by providing CSRs with guided processes designed to streamline the transaction intake
process. iBPMs robust rule capabilities validate transaction information and process
work assignments automatically, auto-generates outbound communications to the agent
or insured, and points them to a Web page if there is missing information. This enhanced
functionality has eliminated costly scanning and indexing costs.
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CHAPTER 11
iBPM: The Core of Modern Enterprise
Architectures
We discussed a number of architecture concepts in previous chapters. Chapter
5 for instance explained the salient features of SOA and how iBPM is the best
way to be successful with SOA initiatives. An enterprise architecture (EA) is the
blueprint of the enterprise, capturing all the models and their relationships that are
needed to associate the strategies and business objectives of the enterprise with
operationalized systems and technology infrastructures.
Why do you need an enterprise architecture? The world is changing faster than most
enterprises can keep up with. IT projects tend to be late and over budget. IT backlogs
are frustrating, both for the business and IT. Sometimes organizations grow with
multiple IT units, each with their own applications, infrastructures, and standards.
The often chaotic aggregate of legacy applications, systems, and solutions needs
robust management, organization, and framework for governance and structure. In
most enterprises there is a gap between the business strategy and the underlying
technology architectures that need to support the management objectives. There are
inconsistencies between business units with little or no sharing of services. Legacy
systems and maintenance often sap IT resources, with little budget left to modernize
and innovate in order to keep pace with business demands.
Now, more than ever, enterprises need to become more agile to face increasingly
demanding customers and constantly changing market conditions. The challenges
addressed by enterprise architectures include silos between various functional
or business units, regulatory compliance, responding to customer demands,
and choreographing with supply chain partners. Enterprise architectures are an
attempt to govern the modernization of the enterprise and narrow the gap between
management objectives and the underlying operations that are intended to support
them. Its goal is to lay a solid foundation for the complexity of the enterprise and
aims to handle the requirements for continuous change. Enterprise architectures
strive to achieve reuse and sharing of solutions or services across lines of
businesses. Through frameworks, methodologies, and end-to-end blueprints for
the entire enterprise, EA initiatives attempt to provide transformed and modernized
enterprise models. EA initiatives also attempt to provide guidelines and frameworks
in order to modernize the enterprise and liberate it from legacy solutions and
outdated technologies.
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Enterprise Architecture Models
EA initiatives are launched to cope with the complexity of the changes in the
business, the dependencies between organizational units, consistency, governance,
sharing across business units, and of course the underlying applications and
infrastructures that need to support them.
Traditionally there are several categories of models that are captured in enterprise
architectures. The four most pervasive ones are:
Business Architecture: This focuses on the business strategy, the
organization of the enterprise, the various services of the business and
the core strategic as well as operational processes within the business.
The business architecture encompasses the objectives, the business
requirements and the business process solutions that are implemented as
business applications (typically and increasingly as BPM applications). The
business architecture also symbolizes the approaches for innovation and
specialization that could easily be achieved by business. Most importantly,
the business architecture needs to realize change and agility. Business
architectures can involve strategic methodologies and frameworks,
such as the balanced scorecard that divides the business vision into four
perspectives: customer, financial, internal, and learning perspectives. The
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business architecture can focus on improving specific measures through

leveraging the application, information, and infrastructure architectures.
Process excellence and improvement methodologies such as Lean Six
Sigma can also be covered by the business architecture.
Information Architecture: The timeliness, analysis, consistency, and overall
quality of information manipulated in business processes and application
architectures need to be very reliable. Information architectures provide
modeling of all entities, their relationships and the comprehensive models
of data and information that are needed to run the enterprise. It includes
structured relational database logical and physical models, as well as multimedia document models and repositories. Comprehensive information
architectures span data extraction, data transformation, and the governance
processes of the enterprises master data. Information architecture also
includes data marts and data warehouses. The data is typically provisioned
and aggregated from multiple applications, in schemata that capture
dimensions and measures. Data mining and predictive analytics can be used
to discover insight from the data.
Application Architecture: In the overall organization of architecture
models, application architecture provides the models, the patterns, and the
designs of the various software components for business processes. The
application architecture blueprints provide all the details of the applications,
including how they interact and leverage information models, the interaction
and interfaces of applications, and the enterprise application design
patterns. Enterprise applications target the support of business objects
and run the business. Thus the models also provide the relationships and
links to components of the business strategies expressed in business
architecture models and complements. In designing applications and their
interrelationships, there are a number of design patterns, such as Model,
View, and Controller (MVC). As noted, SOA provides another relatively more
recent pattern, especially in the context of the service-oriented enterprise
that we discussed in Chapter 5.
The Infrastructure (Technology) Architecture: This focuses on the
organization of the hardware and core infrastructure software that is
required to support the performance, security, and reliability of the
enterprise. Typically there will be clusters of servers interconnected over
local and wide area networks. Increasingly enterprises are also deploying
on the cloud leveraging Infrastructure as a Service (IaaS) to deliver
infrastructure resources, such as storage, networking and servers, as
a service. Rather than purchasing servers and network equipment, and
worrying about data-center space, clients instead buy those resources as
fully outsourced services. See Chapter 13 for more information on IaaS.
The point is that all these artifacts are interrelated and modeled, and the focus
of the EA initiative is to come up with the miniature model, the blueprint of all
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these interrelated architecture artifacts. There have been many frameworks and
methodologies for enterprise architectures. Some of the more popular ones include
the Zachman framework,33 TOGAF,34 and the Federal Enterprise Architecture.35 EA
initiatives model the enterprise and attempt to align the IT execution of operations in
the enterprise to strategic business goals.
A problem that frequently arises in EA initiatives is that you often get paralysis
through analysisthe proliferation of models with many artifacts that cover the
entire spectrum of the enterprise. The result is a collection of blueprints and models
that take many months to design with no actual execution. It is difficult to achieve
alignment to the business strategy when using a pure modeling approach. This is
similar to building a miniature model of a house or a building without considering the
actual structure/execution and only using the blueprint.
Enterprises and their architectures continue to mature and evolve over time. New
paradigms have attempted to capture emerging trends, market realities, and more
modern technologies. They have also attempted to move much closer to execution,
automation and operationalization vs. pure modeling. There are also cultural changes,
Zachman International Enterprise Architecture (2012).About the Zachman Framework.

Accessed in 2012. http://www.zachman.com/about-the-zachman-framework
34
The Open Group (2011). TOGAF Version 9.1. Zaltbommel, Netherlands: Van Haren Publishing.
35
United States Congress House of Representatives (2011). Federal Enterprise Architecture:
A Blueprint for Improved Federal IT Investment Management and Cross-agency Collaboration and
Information Sharing. Washington D.C.: BiblioGov.
33
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such as the emergence of social networking that has given tremendous power to the
voice of the customer, who needs to be listened and responded to in ever-shorter
periods of time. The iBPM philosophy is model-driven development or construction:
What you model is what you execute (vs. what you model is what you generate modeling
artifacts for.) The iBPM philosophy makes the enterprise agile, unlike traditional EA
approaches where the miniature model of the house never gets constructed.
In Chapter 1 we discussed the B in iBPM, defined as the business objectives, the
business requirements and the business solutions that are implemented as iBPM
applications. The B also symbolizes the innovations and specializations that could
easily be achieved by business. Crucially, the B stands for the change and agility
achieved through the iBPM suite. These are very similar to the objectives of top-level
enterprise architecture.
The essential contrast between EA and iBPM is that the latter places emphasis
on dynamic case automation and real-time execution of strategies, rather than
spending a lot of time in big-bang projects that design a number of blueprints
and miniature models with little or no perceived business value. A better way to
characterize iBPM is to think about the actual words business process automation,
implying the automation as well as the management of dynamic cases. The iBPMcentric enterprise architecture sticks to our Think big, but start small strategy,
with emphasis on immediate generation of value. The iBPM architecture focuses
on directly capturing the objectives of the business and executing these. It also
emphasizes the creation of executable models, policies and processes as well as
supporting dynamic cases, as discussed in Chapter 9. Finally, the iBPM architecture
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provides complete visibility into the performance of a certain sector of the business
with the ability to drill down, execute and introduce improvements.
Business and IT Gap
We typically have a gap in many enterprises between the business strategy and the
underlying technology strategy or architectures. In addition to the traditional silos
between IT and business, organizations face the challenge of change, especially
in the current economic climate. Over time, the frequency and magnitude of
change increases due to new competition, dissatisfied customers and disruptive
technologies. As the rate of change increases, the IT-business gap widens.
Customer and Enterprise Gap

In addition to the vertical gap between business and IT, there is horizontal gap
between the voice of the customer and the underlying enterprise with all its
solutions, as we discussed in Chapter 6. Social media interactions, exchanges, and
feedback need to be an integral part of an umbrella case that involves both internal
(to the organization) and external (public social media) sources. When dealing with
various channels and customers, enterprises need to remove potential gaps that
exist between social networking and inbound front-office customer interactions
and the back-office systems that often are required to resolve customer requests,
disputes, or feedback. Enterprises are increasingly differentiating themselves
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through personalized and situational or contextual treatment of customers. This

means, for instance customer service interactions will be guided by a comprehensive
view of the customer, their individual history with the company, current disposition,
how similar customers have been treated, activities that happen within the
interaction itself, as well as the feedback gained from social media communications
through forums, tweets, and other social media channels. In terms of architecture,
there is a gap where the enterprise attempts to respond to the voice of the customer,
but ends up diluting the response in siloed, disconnected systems, functional units,
lines of businesses, departments, teams and roles.
The Modern Business Architecture

The way to resolve and eliminate these gaps is to use an iBPM-focused architecture
to bridge the gaps between business objectives and underlying technology
architectures. Organizations have high-level objectives and the corresponding
specific measurable KPIs to realize those objectives. As illustrated in our discussion
of the business-IT and customer-enterprise gaps, many enterprises have lost their
leadership (even their existence), as they were too siloed (horizontally and vertically)
and late in responding to change.
Enterprises often realize the information that they needed to avoid a crisis or respond
to a trend that was available in the data. But the speed of gaining insight from the
data and more importantly operationalizing and acting upon the insight often lagged
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considerably.36 Typically there is too much data stored in different databases and
information sources. Big data gathered and aggregated from both enterprise and
social media is adding another potential source of opportunities but also challenges.
In addition to historic data, enterprises need to monitor and act upon the data
generated from the day-to-day operationalized activities of business processes and
social media interactions. Through the revamped modern architecture, optimizations
need to be performed globally and holistically, strengthening and addressing
bottlenecks in the weakest links, while keeping the measurable objectives in control
and potentially in real time using iBPM.
In the modern architecture, the underlying technology architecture is important
and leveraged extensively by the core iBPM layer. SOA components and
capabilities provide the foundational plumbing for the business performance
and intelligent business process layers of the modern business architecture.
Another important trend here is the Infrastructure as a Service (IaaS is discussed
in Chapter 13), that provisions the infrastructure on the cloud. Whether on
premise or on the cloud, as we saw in Chapter 5, SOA provides the ability to
loosely couple applications, trading partners, and organizations and invoke them
via service calls. Here again, iBPM is the way to achieve success in service
orientation. Therefore, bridging both business-IT and customer-enterprise gaps
can be achieved through iBPM, especially with its dynamic case management and
analytics capabilities that treat the customer holistically.
See Chapter 4
36
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iBPM can eliminate the gap from business objectives to execution, as well as the
gap from the voice of the customer to the operations in the enterprise. This two-fold
(business stakeholder and customer) optimization transforms the way organizations
build, deploy, and improve business solutions. Organizations are able to realize the
promise of enterprise architecture through the iBPM-enabler engine. Thus KPIs
that are obtained from a perspective of the customer as well as finance (as in the
balanced scorecard), can be easily connected to process improvement initiatives
that are realized through iBPM dynamic case automation projects. iBPMs speed to
execution, agility, and adaptability can provide unprecedented advantage in keeping
up with a rhythm of change as the objectives of enterprise architecture can be
executed and improved continuously.
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Example: Financial Institution Reduces Costs +1Billion

Vision: One of the largest financial institutions in the UK provides general insurance,
life insurance, pensions and investment products to over 12 million customers. It is
using iBPM as the underpinning for more than 200 projects in the enterprise-wide
business transformation program designed to transform its operations and reduce cost
by more than 1billion.
Solution: The company launched a major initiative in three phases. The first phase
re-engineered processes to reduce touch points, handoffs, chasing, elapsed time, errors
and complaints. It introduced a new user interface, the automatic routing of work while
increasing multi-skilling and reducing training requirements. iBPMs scalable architecture,
combined with a strong governance model, provided the right platform for this project.
Results: The bank reduced more than 700 work types on the legacy solution to 23 core
processes, yielding multiple operational benefits. The bank has reduced the number of
cases requiring re-indexing by 80%, while the proportion of cases suspended is down by
50%, handoffs have been reduced by 30%, and number of customer touch points
reduced by 30%.
The bank achieved a 10%

improvement in productivity in
Phase 1. With reusable supporting
processes for use with each of the
core processes, it expects significant
reuse to substantially reduce costs
and development time in subsequent
project phases. The two subsequent
phases will involve interface
integration with back-end systems to
enable automation and more end-toend deployment to maximize automation and minimize manual work. The bank expects to
achieve a similar 10% productivity improvement in each phase.
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iBPM and ECM
This chapter focuses on the relationship between enterprise content management
(ECM) and iBPM. ECM is an enterprise software category that manages unstructured
content. ECM systems deal with the lifecycle of the documents that can originate from
any source or application, such as mobile devices, scanned paper documents, office
application documents, e-documents, faxes, e-mails, digital videos, and images.
The scope of document and content management is expansive and strategic as
information continues to grow exponentially. In 2012, the total amount of digital
information was 2.7 zetabytes, an increase of 48% from the previous year.37 And
how big is a zetabyte? It is 10 to the power 21, compared to a megabyte which is a
million bytes10 to the power 6. A zetabyte is equivalent of a stack of books from
Earth to Pluto 20 times over.38 In other words, very large! In particular, the rate
of unstructured content generationmainly videois accelerating exponentially,
due to social networking, the proliferation of mobile devices, and the advent of
cloud computing which we will discuss in Chapter 13. The vast majority of digitized
information in the universe is unstructured digital information.
This unstructured content needs to be captured, indexed, managed, organized,
accessed (search or navigation), updated (under version control), and leveraged in
enterprise business applications and on the Web. ECM also manages the archived
versions of documents. That is the crux of enterprise content management. As we
shall see in this chapter, iBPM provides the best context and platform for business
applications and solutions that involve multiple ECM systems or enterprise content
sources. iBPM is the content intelligence and agility layer, both in the creation of content
as well as its use and distribution in dynamic case management solutions, as iBPM can
leverage, aggregate, and use both structured and unstructured digital information.
Enterprise Content Management Lifecycle

ECM spans the end-to-end lifecycle of documents or unstructured information.
The objective is to deliver timely and precise content to decision makers and all
categories of workers including transactional, knowledge-assisted workers, and
knowledge workers.
Wikipedia (2013). Zettabyte. Last Modified July 29, 2013. http://en.wikipedia.org/wiki/
Zettabyte
38
Evans, Dave (2011). Ten in Ten: Ten Technology Trends that will Change the World in Ten
Years. Paper presented at the Cisco Expo, Kiev, Ukraine, November 1-3, 2011.
37
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Information or content can be categorized as structured and unstructured.

Examples of structured information include relational database tables with
various columns or fields, such as tables for employees, customers, suppliers,
and products. These are managed with Database Management Systems (DBMS),
especially relational databases.
All other types of digital information are examples of unstructured content which
constitute more than 85% of an organizations information base. As we have noted,
modern-day digital content emanates from a variety of sources, including documents
generated by office applications, scanned documents, and a rapidly growing body
of multi-media types generated via social networking systems including text, audio,
images, and video. ECM spans the lifecycle of all this unstructured digital content,
from creating or capturing content and optical character or image recognition to
editing, publishing, versioning, indexing, searching and archiving.
ECM and Dynamic Case Management

Unstructured and multi-media documents are essential in many iBPM applications,
and especially dynamic case management applications that involve unstructured,
collaborative processes. iBPM manages structured, production workflow as well as
unstructured and collaborative dynamic cases. The accompanying illustration shows
the anatomy of a dynamic case which includes unstructured digital information. This
unstructured content can originate from potentially multiple ECM repositories. In fact
unstructured content used in the case can be:
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1. Created and managed by the iBPM platform. For instance, an insurance agent
can take a picture of an automobile via a mobile phone and that becomes part of
the case content, directly attached to and managed by the iBPM case repository.
2. Alternatively, in the context of dynamic case applications, the content can be
managed by underlying ECM(s), but accessed seamlessly within the dynamic
case. An enterprise typically will have ECMs, with five or more ECM platforms
from the same or different vendors not uncommon in large enterprises.
Document Metadata
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Its important to note that in this second scenariomultiple ECMsyou will have
references or document resource links to the documents within the case. While the
iBPM manages the processes, the actual documents are stored and managed by
the underlying ECM. From an application or resource point of view, this access is
transparent: The user searches or navigates to a document and then uses it in the
case, without worrying about where it came from or how it is managed.
Multi-media documents have metadata fields or properties. Some of these are
built in, such as the author, creation date, date last modified, size and so on.
Others could be defined by ECM application developers for specific customer
application types. In iBPM applications, there are different types of data. There
are built-in attributes that are designed and managed by the iBPM platforms,
such as the status assigned to the case of Open, Suspended, or Closed; the
creator or originator of the case; the time the case was created; the purpose of
the case; and many more. There are also custom fields or properties in the iBPM
dynamic case application. For instance, a procurement application will include
the originator of the procurement request, the amount, the purpose, as well as
the items that need to be procured. In addition to these (potentially structured,
complex, or unstructured) fields or properties and documents, the iBPM case can
include data from a plethora of sources. Some of these are relational databases
(structured) and others are ECM systems (unstructured). Interestingly, almost all
iBPM applications involve unstructured data, reflecting the fact that 85% of an
enterprises digitized information is in unstructured format.
iBPM allows data exchange and interoperability with ECMs be seamless, and iBPM
properties can be mapped onto the metadata of the documents. For instance,
if a document has a customer attribute, say Location, then that field can map
automatically to a property of the iBPM dynamic case solution. The value can be
used to decide how to route the document in an iBPM decision rule. The documents
that become part of the iBPM applications case actually continue to be managed
by the underlying ECM while iBPM models and automates the business policies and
procedures around the use of these documents.
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iBPM provides a layer and platform of agility with the ability to aggregate content
from multiple ECMs. The Oasis39 organization has developed a standard application
programming interface called Content Management Interoperability Services
(CMIS), which is similar to relational database standards such as SQL and standard
Java APIs, including JDBC. ECMs use this standard for interoperability, and it is
through this standard layer that the iBPM solution can reference one or more ECMs,
seamlessly linking to the documents managed by these systems in dynamic cases.
Intelligent BPM for ECM

Documents (including rich media and application documents) are quite common in
business process management applications. Here are some examples:
A loan processing application will include faxes, original signatures, and
images of the property as attachments to the form.
A service processing application will have attachments such as the service
agreement, service project sheets, and invoice.
A compliance application will have the Request for Proposal document,
policy documents, and legal attachments.
Oasis Content Management Interoperability Services (CMIS) TC (2012). Oasis Standards.
Last Modified June 21, 2012. https://www.oasis-open.org/standards
39
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There is a clear division of roles and functionality between DBMS for structured data,
ECM for unstructured data and iBPM for automated cases that create, update, and
use both the structured and unstructured data. Knowing the tremendous value that
ECM provides to iBPM dynamic case solutions, it is also important to consider the
advantages that rules-driven iBPM provides to ECM.
An intelligent iBPM platform allows documents and content managed with ECM
tools to be involved in policies as well as practices of the organization to elevate the
use and visibility of ECM artifacts. iBPM also allows the contents document and
folder metadata to be used in different categories of business rules. Thus decisioning
rules, interfacing, and event correlation can be applied to the ECM objects and then
used to drive processes with ECM content. For example, in a dispute process, iBPM
can be integrated with the ECM system so that the dispute can be resolved, tracked,
audited, communicated, and resolved in an expeditious and controlled manner.
In addition to the intelligent business process enablement of ECM, iBPM can be used
to manage exceptions, one of the more complex and challenging issues in software
engineering. For example, a loan application that is delayed beyond 30 days can
launch an exception-handling process that analyzes the loan application phases.
Most large enterprises typically include several federated content repositories.

Here the iBPM solution can become the aggregation point for the distributed ECM
platform. These repositories can have different levels of support for document
retention and streamlining of documents between hierarchical storage module
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layers. iBPM provides tremendous added value by managing rules pertaining to

different repositories through a central, intelligent aggregation point with digitized
policies and processes.
We conclude this chapter with four distinct advantages of iBPM for ECM:
iBPM Dynamic Case Layer for Document Lifecycles: As indicated above, content
goes through a lifecycle from creation and capture to indexing, storage, and
versioning in published, readily searchable or navigable content repositories.
Sometimes the tools and facilities for the enterprise content lifecycle are
provided by different vendors, some of which focus on capture, others on storage
or content retrieval. Furthermore, an enterprise typically maintains multiple
ECMs. Dynamic case management can provide an ideal intelligent, robust, and
uniform solution to control the various tasks and phases in document lifecycles
as it delivers an agility and modernization layer, while leveraging and integrating
with underlying ECM technologies.
iBPM Dynamic Cases Integrate Documents from Heterogeneous ECMs: The
workflows in ECM can only process the documents within their own repositories.
With dynamic case management, users can create sub-cases that contain
documents from different ECM repositories. For instance, a purchasing
system for services needs to reference legal documents, license maintenance
agreements and support documentation from different systems of record.
With iBPMs rich collection of business rule types, you can invoke multiple
workflows and use rules-driven integration to drive the invocation as well as the
management of work across multiple ECM repositories.
iBPM Can Act as the Central Intelligent Aggregation Point for Global
Retention Policies: This means there is a central and separate retention rule
set that is managed by iBPM. IT, in collaboration with business stakeholders,
can delegate the retention rules to the appropriate owner. More importantly,
instead of updating retention policies in different ECM systems or
repositories, the iBPM can provide a central governing policy for the entire
extended enterprise and enforce regulatory compliance policies. With a
common retention policy, there is no need to implement and maintain the
retention functionality within multiple ECM products, allowing for flexibility in
planning, migrating, or even outsourcing these functions. Policy changes are
readily available and can be quickly enforced through periodic updates of the
retention parameters for the individual ECM suites.
iBPM Context for Social Networks

iBPM provides the context for social interactions, while at the same time
leveraging synchronous and asynchronous social networking capabilities in iBPM
solutions. The content management world is changing significantly with the
introduction of social interactions and media in the enterprise. Customers and
consumers are now accustomed to participating over these social networking
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channels. Most of what they collaborate, discuss, or exchange ideas about

is unstructured, multi-media content, such as videos on YouTube or pictures
posted on Facebook. To manage this type of content, modern enterprise
software, including iBPM and ECM, are increasingly social-enabled. Even more
importantly, within the context of dynamic cases, various types of workers can
publish, operate, and interact with public social networks while at the same time
leveraging same-time (such as IM, chat, or real-time video) and different-time
(such as discussion traces, Facebook, Google+ or Tweets) channels.
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Example: Integrating iBPM to Manage Content End-to-End

Vision: A bank sought to drive their customer first mission while meeting the ever
changing needs of their customers. Several internal studies supported the working theory
that loyalty was a key driver of growth. As a result, the bank focused on making it easier for
their customer request management process to deliver rapid and predictable responses to
clients. Requests arrived through multiple
channels (e.g. phone, branch, fax, e-mail) in
eight different geographic regions and then
went to 14 different service fulfillment groups,
each with different systems and processes,
and each of the systems had different types of
content. This complex web made it challenging
to correctly route specific inquiries, set
response time expectations and provide
updates on existing requests.
Solution: Using iBPM technology, the bank rebuilt an end-to-end resolution process
spanning channels and lines of business. With easily navigated screens, coaching tips
and step-by-step prompts, the end-to-end resolution process guides users through
the complexities of documenting problems. It even immediately resolves cases at the
point of service. The process automation capabilities of this new backbone drive higher
efficiency rates by automatically retrieving customer data required for resolution,
routing cases to the correct support group or individual, and generating supporting
forms and correspondence.
Results: The banks proprietary studies quantified the hard dollar benefit of an improved
customer experience. That allowed them to align the project with their client first vision
instead of just focusing on productivity gains. With enforceable SLAs tuned for each request
type, customer segment and fulfillment group, the new end-to-end resolution process
presents high confidence service commitments. Representatives can now accurately
manage expectations and provide expedited service to higher value clients; leading
to a better customer experience and a stronger loyalty bond. The automated processes
drastically reduced errors and duplicates which allowed the support staff to focus only on
the steps that required their skill and judgment. The bank was not only able to decrease
the total elapsed resolution time (in some cases down from five days to 30 minutes), but
also reduced back-office headcount by 20% in the support organization. When the solution
was rolled out to the 30,000+ users, the field adoption rates, with no training for the agents,
were greater than 60% for Phase 1. By Phase 2 they had climbed to 80%.
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Cloud iBPM
Cloud computing is one of the hottest technology trends of the past decade.
Software, platforms, and infrastructures on the cloud (which means accessed
via the public Internet through a browser or mobile device) are fast becoming the
preferred mode of provisioning enterprise software. All of the iBPM capabilities
discussed in the previous chaptersboth from solution development and execution
perspectivescan be on the cloud. iBPM can provide an ideal cloud-based platform
to design and build business solutions. For instance, dynamic case management
solutions can be built on the cloud, and social collaboration on case design, UI, or
business decisioning logic can also be achieved via the cloud. As we shall see in
this chapter, there are distinct advantages of cloud computing over traditional onpremise deployments and solutions.
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What is Cloud Computing?

Cloud computing is a mechanism that enables users to access various types of
services over the Internet (networks, servers, storage, and business applications)
conveniently and on demand. There are multiple defining characteristics of cloud
computing as follows:
Deployed Over the Internet/Intranet: This is essential. Cloud computing could
as well have been called Internet computing. However, in some (especially
large) organizations in the private and public sector, all the advantages of
cloud computing are leveraged within the firewalls of the enterprisein other
words within the Intranetbecause of security considerations. This is called
private cloud in contrast to public cloud. Private cloud extends traditional
client/server computing (typically with thick-client applications that need
to be installed) to mobile app or thin-client, browser-based, provisioning. A
large organization can provide all the benefits of on-demand provisioning of
solutions within the organization. However, the organization still needs to
provide and maintain its own server farms and data centers. So increasingly
the term cloud computing is becoming synonymous to public cloud computing
as opposed to private cloud computing.
Pay as You Use: Cloud computing is like utilities: You pay for as much as you use.
In fact, the analogy extends to the ease of plugging into the fabric of the cloud
and then being billed based on the usage of resources. This means the waste
that is incurred to purchase and provision on-premise systems or data centers is
avoided. Often organizations drink the on-premise software Kool-Aid, only to end
up hoarding shelf-ware that does not get used.
Scalable and Elastic: Cloud computing provides an elastic environment where
additional resources can be easily be added as needed for scalability. This is an
important advantage of cloud computing because you can easily grow (or shrink)
your requirements. It is similar to adding additional phone lines, or increasing
your utilities consumption or Internet computing bandwidthall on demand.
Multi-Tenancy: Multi-tenancy is often associated with cloud computing. The
term comes from apartment rentals. The tenants in an apartment building share
many resources, such as security, landscape and parking facilities, to name a
few. However, each tenant has his or her own secure and private apartment.
Thus resources are shared, without compromising privacy. Multi-tenancy is
an architecture where resources, including hardware resources (computing,
database, networks) and software resources are shared among multiple
customers or tenants. In fact, multi-tenancy is one of the main reasons some
large organizations are reluctant to trust the cloud. They are uneasy about
the potential security risks when trusting mission-critical data to the cloud. On
the other hand, multi-tenancy and shared resources are key reasons that the
cloud is relatively inexpensive.
Business-Friendly Browser and Mobile App Access: Cloud services are accessed
over the Internet and increasingly through mobile devices such as tablets and
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smartphones. This provides tremendous flexibility in accessing applications and

solutions for an increasingly mobile workforce.
XaaS: There are many categories of services that can be provisioned on the cloud
such as Infrastructures as a Service (IaaS), Platform as a Service (PaaS), and
Software as a Service (SaaS).
Why Cloud Computing?
Cloud computing is becoming extremely popular. By some estimates, the cloud

computing market will reach $241 billion by 2020. The cloud software market is
growing extremely fastfive times faster than the software market as a whole.40
There are distinct advantages to cloud computing:
Provisioning is much faster, whether you are provisioning hardware or
business applications.
The lifecycles of updates or changes to the resources, such as new versions
of the software or application, are shorter and more agile.
Cloud computing enables you to easily scale and add more capacity to
handle larger numbers of concurrent users for a business application
deployed on the cloud, for example.
Cloud computing provides increased visibility and control, especially for
the business. The business is empowered to select specific business
applications and start using them.
Cloud computing can be much more cost effective since you pay for what
you use. The subscription-based, pay-as-you-use model is very attractive
to organizations that are struggling financially or at the very least are
attempting to control up-front costs of servers, data center rental space,
and on-premise software licensing.
Robert P. Mahowald and Connor G. Sullivan (2012), Worldwide SaaS and Cloud Software
2012-2016 Forecast and 2011 Vendor Shares, International Data Corporation. http://www.idc.
com/getdoc.jsp?containerId=236184
40
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What Type of Service?

As mentioned in our description of cloud computing characteristics, there are
many categories of services with IaaS, PaaS and SaaS being the three most
common and important.
IaaS: At the bottom you have Infrastructure as a Service which is used to deliver
infrastructure resources such as storage, networking and servers as the service.
Rather than purchasing servers and network equipment, and worrying about
data center space, clients buy these resources as fully outsourced services.
There is an important concept that is usually associated with IaaS and that is
virtualization.41 The concept of virtualization has been around for a while, used
for decades by mainframes to allow multiple operating systems to run on the
same hardware server. It also applies to other types of infrastructure resources
such storage. Virtualization is used extensively by IaaS providers.
PaaS: Platform as a Service lies between the IaaS and the SaaS types of service.
Clients can use a PaaS offering to build complete business applications on the
cloud. A PaaS offering can be extensive and include a development environment,
testing, deployment, and hosting of the developed application on the cloud. So
the entire lifecycle of development is provisioned on the cloud, including
collaborative design of processes, business rules, decisioning, reports for activity
monitoring, UI, integration, as well as application versioning. The solutions that
are tested, designed, and developed on the cloud can target various types of
channels, including mobile devices.
http://en.wikipedia.org/wiki/Virtualization
41
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SaaS: Software as a Service is perhaps the most popular type of service on the
cloud. Here, complete business solutions are accessed on the cloud by clients
using Web browsers as well as mobile devices such as tablets or smartphones.
The cloud has become a common delivery mechanism for many applications for
collaboration, content management, accounting, human resource management
and customer relationship management.
iBPM and the Service Models

iBPM can leverage any of these service models to support the development, testing,
and deployment of iBPM solutions on the cloud. The two service layers most
commonly associated with iBPM are PaaS and SaaS. Here are the options:
iBPM PaaS: You can provide end-to-end development, testing, as well as

deployment of iBPM solutions over the cloud via browsers. iBPM suites are an
ideal way to build applications and easily change them on the cloud, making
the iBPM platform a PaaS. It is important to note that to make this successful,
the unified capabilities of the iBPM suite, including process design, business
rules, decisioning, case types, integration, UI development, as well as managing
projects and testing, should all be available on the cloud to support a complete
business application platform development lifecycle as a service.
iBPM SaaS: Once the application is tested and deployed, it can be accessed as a
SaaS on the cloud. This includes the applications dynamic case UI elements, as
well as the activity monitoring of the automated cases via browsers and mobile
devices. Complete business applications, such as customer service and support,
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marketing automation, or claims management can be built as an iBPM solution

and deployed on the cloud. Of course, the advantage of building enterprise
business solutions with iBPM is the agilitythe ability to make changes very
quicklyas well as the overall visibility and control of the solution, all of which are
augmented by the ease of access enabled by the cloud.
In summary, you can securely build and execute iBPM applications on the
cloud. Building the solution and the development lifecycle using an iBPM
platform corresponds to PaaS. Once the iBPM solution is built and deployed on
the cloud, it becomes a SaaS. Both options can be supported and provisioned
on the cloud by iBPM.
When to Use the Cloud: Flexibility through iBPM

When should organizations use cloud computing for their enterprise applications?
As mentioned above, cloud computing has a number of distinct advantages, from the
speed of provisioning to cost effectiveness.
However, there are reasons for caution. First, cloud computing empowers the
business and, as we discussed in Chapter 5, this can lead to shadow IT and
the presence of solutions within the enterprise that are not formally sanctioned
by the enterprises IT organization and its governance procedures, especially for
security. Through cloud computings flexibility, business can potentially purchase
and provision software solutions using their credit cardsbypassing the IT
organization altogether.
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When it comes to cloud computing, the most serious concern for CIOs is security.
Other concerns include availability of the service, performance of solutions deployed
on the cloud, and reliability with special concern over losing or corrupting missioncritical data. While all these are legitimate concerns that apply to on-premise
solutions, moving applications and mission-critical data to the cloud managed by a
third party elevates the enterprise data protection security and reliability risks.
What enterprises need is the flexibility offered through iBPM to overcome these
concerns. Both business and IT can achieve their strategic objectives including speed
of provisioning, cost reduction, and agility for the business, as well as enforcing
security, performance, and reliability policies for IT. iBPM provides the following
capabilities for leveraging the cloud in a sensible and secure way:
Development and Testing in iBPM PaaS: You can develop and test on the
cloud, and then for security reasons bring the solution on-premise. iBPM
platforms allow the integration to be simulated on the cloud, and then the
actual plumbing of service or application orchestration can be implemented
on-premise. Often cloud solutions need interaction with enterprise
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applications that are deployed on-premise. In fact, if an application needs

constant exchange of data with internal enterprise applications, it might not
be a good candidate for production cloud deployment. However, iBPM as a
development platform (PaaS) is always a good choice.
Deploying on the Cloud: iBPM SaaS: Increasingly, robust iBPM security
solutions on the cloud are supporting industry regulatory standards (such as
HIPAA,42 European Union Data Privacy43, and others) along with data encryption.
Furthermore, service providers are guaranteeing high rates of service availability
as well as reliability through mirroring and automatic backup. In other words,
as cloud computing matures, increasingly the mission-critical IT governance
requirements are addressed, sometimes on par with the standards of onpremise deployments. In addition, it is possible to do secure tunneling and
access enterprise applications or data that is deployed on-premise, allowing
iBPM applications to be cloud-based. This flexibility of moving between onpremise and cloud is an essential value of cloud-enabled iBPM.
Move to the Cloud: The flexibility for capturing the iBPM solution assets and
their portability means you can also take an iBPM solution currently deployed
on-premise and move it to the cloud. This option can be especially attractive in
freeing the enterprise from the maintenance of data centers as it enables the
infrastructure to be outsourced to the cloud service provider.
Hybrid solutions and options for different categories of iBPM solutions are
also possible. Furthermore, mature mission-critical iBPM cloud solutions support
private cloud options with the enterprise having their own secure operating
system, database, web servers, and so forth. In other words, advanced and mature
cloud iBPM solutions are allowing enterprises to address the agility requirements
of the business and yet still comply with the stringent security and reliability
governance policies of IT.
United States Department of Health & Human Services (2013). Health Information Privacy. Accessed August 6, 2013. http://www.hhs.gov/ocr/privacy/hipaa/understanding/summary/index.html
43
European Commission (2013). Data Protection. Accessed August 6, 2013. http://ec.europa.
eu/justice/data-protection/index_en.htm
42
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Example: Fast, High-Volume Entertainment Delivery through

the Cloud
Vision: In the supply chain world, time is money. Controlling the most market share, this
large entertainment company faced the challenge of addressing the growing complexities
of its global supply chain in very little time. Its supply chain spans across multiple
geographies and languages, and across a mounting array of new channels and media
formats. Anything that helps the business shorten lead times and reduce the effort and
costs of getting products to market is a huge advantage, given that each title may have
tens if not hundreds of product variables. The solution had to be available on demand in a
cloud-based deployment that would allow the company to get to market quickly and scale
the solution over time.
Solution: The entertainment company deployed a cloud-based iBPM case management
solution that is tightly integrated with their previously existing supply chain solution. Via the
cloud, the company easily and quickly receives data from suppliers while maintaining
robust data security, enabling low up-front costs and low risk for
management. Dynamic case management empowers business
users and allows them to maintain tighter control of all
processes as users can see the entire international supply chain
and have the flexibility to specialize the delivery process.
Developing and deploying on the cloud enabled the delivery team
to bring the solution live in just nine weeks, just in time to meet a
holiday deadline and provide delivery partners with an easy,
secure integration.
Results: The entertainment company anticipates it will save 5 million per year from
efficient operations (lower freight costs, transportation expenditures, and improved restock
calculations) and superior time management. The company can now make blockbuster
releases available to its largest distributors in advance, expanding the profitability of each
release. It has met aggressive sales targets for high volumes of product. For example, it
recently shipped over six million copies of a video game in just two months, with the titles
landing in stores on the same day, worldwide.
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iBPM-Enabled CRM for Customer Centricity
iBPM is for customer centricity. What exactly does that mean? It means the needs,
expectations, and overall experience of the customer drive the processes and
policies of the organization. Very few companies are really customer centric, which
is not surprising given most commercial organizations are driven by profit. However,
there is a direct link between commercial success and customer centricity. In a very
real sense, this chapter is the culmination of the previous chapters when it comes to
the value proposition of iBPM. As we shall see, iBPM-enabled customer relationship
management (CRM) provides tremendous opportunity to operationalize and optimize
the customer experience in order to increase profitability.
Measuring the Customer Experience
How does a company know it is providing an excellent customer experience? Of

course, the actual financial success of the commercial enterprise is one obvious
measure. While revenue will eventually make or break a company, there are
other measures that are much better predictors of the organizations customer
centricity and overall success (or failure). One of the most robust measures for
assessing the experience of the customer has been the Net Promoter Score
(NPS).44 Introduced by Fred Reichheld in 2003, it is fundamentally a singlequestion assessment or survey about a customers willingness to recommend a
Satmetrix Systems, and Fred Reichheld.
44
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product or company to his or her network of friends and acquaintances. The score
is on a scale 0-10. Promoters are those who scale 9-10.
With iBPM-enabled CRM, especially customer service and support, organizations
can keep their NPS (or other) measures critical to the customer experience in
control in real time. This is very much a Lean Six Sigma optimization challenge and,
as we discussed in Chapter 9, iBPM is an ideal platform to monitor and control
all process and performance measures as well as proactively handle potential
challenges also in real time.
What is CRM?
CRM is about managing the relationship between a company that is offering products
or services and their customers. CRM involves marketing the companys offerings,
selling them, providing customer service and technical support, and up-selling and
cross-selling further products or services to existing customers. CRM is automated
and operationalized through three essential components:
Marketing Automation provides solutions for marketing lifecyclesfrom
planning marketing programs, to the design and execution of inbound and
outbound marketing campaignsvia multiple channels.
Sales Force Automation solutions manage the stages in a sales process
including following up on leads generated by the marketing campaigns,
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building the relationship with the customer, assigning accounts, and

eventually closing the sale.
Customer Service and Support solutions assist customers, through processing
their claims, solving problems, answering questions, and responding to their
requests. Service and support is provided through multi-channel contact centers
and self-service websites or mobile apps. Service and support solutions can also
cross-sell and up-sell to existing customers. This is important, as it is well known
that it costs a company about six times more to sell a product to a new customer
than to an existing customer.
Evolution of CRM
There have been a number of significant trends and milestones in the evolution of
CRM. One of them is analytics, especially predictive and adaptive models leveraged
in marketing and sales, as well as in service and support. As we discussed in
Chapter 4, predictive techniques can be used to gain insight from market trends
and customer behavior, and these discovered models can be operationalized
and automated in iBPM solutions. With the ability to learn from the market and
customer behavior during a specific customer interaction, analytics is a useful tool
to strategize the Next-Best-Action45 for a specific customer, taking into consideration
the individuals background as well as transaction and/or interaction history.
Social networking has also had a profound effect on CRM, as it has given
customers a powerful voice, allowing them to instantly provide feedback (good and
bad) and share ideas about products, services, and companies. As we discussed in
Chapter 6, listening to and communicating with customers via social channels is
now critical for success.
With iBPM-enabled CRM, companies can leverage both the analytics and social
networking that have profoundly affected managing the customer relationship,
http://en.wikipedia.org/wiki/Next-best-action_marketing
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enabling organizations to deliver targeted marketing promotions, optimized and

automated sales processes, and guided service interactions. Predictive and adaptive
analytics in iBPM let organizations learn, discover, and then operationalize predictive
models in marketing, sales, and customer service. With adaptive analytics, the
decision strategy for the customer continuously learns and adapts to changes
in customer behavior or market dynamics. iBPM also enables organizations to
dynamically analyze and respond with the right action for each customer. Customers
can be heard and responded to through holistic and dynamic cases involving all
participants who are needed to resolve the case.
When CRM components and capabilities are built on top of an iBPM platform,
they inherit all the advantages of iBPMprocess centricity, visibility, control, and
transparency into the CRM policies and procedures, as well as the key capability to
easily adapt, introduce change, and be agile.
iBPM-Enabled CRM for Customer-Centric Transformation

There is important technology as well as cultural trends that are influencing the
transition from traditional CRM to iBPM-enabled CRM. The new generation of
customers are quite tech savvy as they leverage social media extensively and expect
instant change. They also want to be treated differently, based on their history,
background, or situation. iBPM-enabled CRM supports each of these customer
trends as it enables organizations to go from:
Confusing data-driven forms to intuitive processes, decisions and

guided interactions.
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Commodity services to delivering tailored, personalized treatments using

situational execution to take into consideration such factors as the customer,
service, product, reason for the interaction, and geographical location in
order to execute the business logic.
Manual work with manual handling of exceptions to holistic, end-toend automation through dynamic case management. Dynamic case
management also connects the front and back office to deliver a consistent
customer experience across multiple channels. Sub-cases handled by
different teams or organizations are all aggregated through the holistic case
to meet a specific customer objective.
The black box of traditional CRM packages that hides the business logic
and is very difficult to change, extend, or customize to complete transparency
and visibility of all the procedures, policies, and decisions within the CRM
solution that simplify change, maintenance, and customization.
Product and enterprise focus to customer-centric recommendations based
on customer needs and the lifetime value of the customer.
Optimizing the Customer Experience
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iBPM and its ability to engage in continuous improvement provides distinct and
important advantages to optimize the customer experience. With the various
operationalized CRM components driven by iBPM, organizations can:
Seamlessly Manage the Multi-Channel Experience: The customer can
start an interaction in one channel, such as a mobile device, and continue
without interruption in another channel, say the Web or on the phone with a
customer service representative. The entire context and the end-to-end case
of the customer interaction are maintained across the channels.
Act as One Company to the Customer: Because case management can
include multiple sub-cases involving different teams, departments, or units
within the enterprise, dynamic case management allows the coordination
and collaboration of multiple participantsall working together to meet the
customer objective. This holistic aggregation is essential for transforming
the customer experience.
Personalize Interactions: iBPM allows different customers to be treated
differently. For example, depending on the value of the customer, product,
location or service, the most appropriate discount can be offered. Analytics
is leveraged for the Next-Best-Action for the customer. In addition, with
iBPM, the business has complete visibility to make changes to policies or
procedures that affect customer treatments across the customer lifecycle.
iBPM Analytics and Next-Best-Action for CRM

Its worth spending a few minutes looking at how to use iBPM analytics and Next-BestAction to optimize customer experiences in a little more detail. As we defined earlier,
Next-Best-Action leverages real-time decisioning using predictive models, adaptive
models and business rules to identify optimal (best) actions in iBPM solutions.
One of the best ways to optimize the customer experience is to leverage the analytical
insight that can be mined from data to support decisioning for the customer. This
applies to marketing, sales automation, and perhaps most importantly, customer
service. The sources of the decisioning strategy emanate from:
Business rules that are authored by experts or knowledge workers
Demographic, census, or other externally sourced data
Transactional data from the enterprise information systems within
the organization
Data warehouses and data marts that aggregate data from many sources
Business rules are authored as explicit, discrete, and static knowledge provided
by experts. Often these are captured in rule books or various policy and procedure
manuals. Any of the iBPM rule types, such as decision trees, decision tables,
constraints, and expressions, can be used to optimize the experience by driving the
processes and dynamic cases to resolution.
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Businesses have many hidden treasures in their systems, such as data held in
operational databases, data warehouses and even census or publicly available data.
There is value in the individual data sources, but even more so in the combination of
them. Customer purchase patterns, satisfaction drivers, and future behavior can be
uncovered in this data and used to tailor the customer experience.
The whole purpose of and motivation for predictive analytics is to discover these
patterns, use them to predict future behavior, and then act on the insight. As we
have discussed in Chapter 4, predictive analytics is the science behind mining data
for repeatable patterns that are reliable enough to serve as a basis for predicting
the future. Such a reliable, repeatable pattern, when found, can power a crystal ball
that will improve many business decisions, and embedding models in customer
processes offers a particular fertile area. For example, you can use predictive models
to reach out, proactively, to customers who are likely to churn, buy, or default.
Adaptive analytics, which looks at a moving window of data as it enters the system,
offers further opportunity to increase the personalization, relevance, and value of the
interaction to the customer. Analytics should result in models that can be enacted
and deployed, especially in iBPM solutions. Therefore, the power of predictive and
adaptive (or rather static predictive and adaptive predictive models, as both categories
predict future behavior), is realized in iBPM solutions that leverage the discovered
predictive models, augmented by business rules and the context of the process. This
enables human participants, such as customer service representatives, to make
better decisions to cross-sell, up-sell, retain, collect, or service through prioritized
Next-Best-Action recommendations.
With iBPM-enabled CRM, the complete spectrum of decisioning is supportedpredetermined from the minds of knowledge workers and experts; predictive models
discovered from historic data; and decision strategies that learn and adapt to
changes in customer behavior or market dynamics. Customer behavior can change
because of demographic trends, legislation, interest rates, or a myriad of other
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factors. Similarly, competitive offers or pricing can stir things up and impact how
customers behave. Rather than trying to re-calibrate predictive models manually
forever testing and re-developing updated versions when a model becomes less
accurateadaptive systems update automatically without human intervention.
Customer-Centric Enterprise Architecture

Chapter 11 explained why the best way to achieve and realize the objectives of the
business strategy is to make iBPM the core of the overall enterprise architecture.
With CRM, the objective is to become customer centric and address specific
performance indicators pertaining to customers, such as Net Promoter Scores.
iBPM bridges the gap between CRM performance measures and underlying
implementations across marketing, sales, and service.
In addition, as we have discussed, iBPM is optimal to address the gap between

the voice of the customer, heard through either social networks or inbound
communications, and the underlying enterprise with all its solutions. Recall in
Chapter 6 where we discussed the relationship between iBPM and social networking.
Again, the point is that we have a gap where the enterprise attempts to respond
to the customers voice, but often the response needs dynamic case management
to aggregate or provide an umbrella where various lines of business, departments,
teams, and roles can respond to the customers issue. The gap will only close if
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dynamic case management is employed, enabling the organization to align itself with
the voice of the customer and eliminate all the internal enterprise silos using iBPM.
Finally, as we pointed out in Chapter 13, the flexibility of moving between on-premise
and cloud deployments is an essential requirement for many enterprises leveraging
iBPM for their CRM solutions. Thus, any of the three components of CRM can be
developed and deployed on the cloud or on-premise, and the organization can easily
move between these two deployment options, or design and develop in one, such as
the cloud and move the solution into the other, such as on-premise.
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Example: iBPMEnabled CRM for Warranty Management

Vision: A leading warranty provider had a number of business challenges in its warranty
management processes. It wanted to increase sales, lower the cost of services, and
improve overall operational efficiencies. The company had just 90 days to implement a new,
flexible contact center solution to support the contract. The solution and migration had to
be seamless, with zero impact on the customer service representatives (CSR) ability to
service existing contracts. The company needed to integrate the CSR desktop with existing
customer and contract data sources, as well as the retailers systems for original purchase
details and replacement product fulfillment.
This process had to be easy to repeat for all
new clients, and support unique processing
requirements and branding each time. The
solution had to provide a seamless, branded
experience for the end customer, but ensure
CSRs had a consistent and familiar user
interface in order to maximize efficiency.
Solution: The company implemented an iBPM-enabled CRM solution and achieved all of
their business objectives in just 70 days. The project required just four members of the IT
team to complete. A company executive indicated that building the same capability with
traditional approaches would have taken at least two or three times as long with three
times the resources.
Results: While a large new client was the impetus for the iBPM-enabled CRM solution,
it has now been rolled out to all of the companys retail clients, across its seven national
contact centers. The company is well positioned for future growth, and their ability to bring
new clients on board in less than three months is a key differentiator in winning contracts
with major international retailers. The enhanced case management, process automation,
and integration with retailers systems have significantly decreased time to resolve
customer inquiries and improved customer service levels. The company reports high levels
of satisfaction across all clients.
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CHAPTER 15
Pega iBPMThe Next Wave for CustomerCentric Business Applications
This book has shown how intelligent iBPM has matured and evolved to become a
viable platform for business applications. iBPM is often touted as a management
discipline for improving processes and as a technology that
supports agility and change through automation. It is, of
course, both. However, the most important value proposition of
iBPM is intelligent automation. With intelligent capabilities in a
unified platform, iBPM becomes the core of the modern
business architecture.
Pegasystems has developed Pega iBPM as the next-generation platform to Build
for Change agile solutions involving the collaboration of business, operations, and
IT. With the Pega iBPM platform, you can easily build and adapt customer-centric
solutions that involve automated processes, decisions, interfaces, and end-to-end
enterprise integration with zero code! The innovative and transformative capabilities
of Pega iBPM have led analysts to recognize Pegasystems as the worlds leader in
intelligent Business Process Management.
Best of Build and Buy for Transformational, Innovative, and

Adaptive Applications
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How do organizations deploy applications to keep up with the increasing demands

of business stakeholders and continuous change? How can they become agile and
innovative? Perhaps most importantly, how can they achieve pragmatic business
transformation?
Traditionally, there have been two approaches. One is to build the application inhouse, using a technology stack with custom coding done by the IT organization,
off-shoring, or a combination of both. The problem with this approach is that it
is costly, difficult to maintain, and solidifies siloed roles of business stakeholders
and IT. Another problem is that industry best practices are not leveraged, and all
requirements need to be custom built, in-house. Coding and technology stack
development tools do not lend themselves to agility, visibility by the business, or
business control.
The other end of the spectrum is to deploy a point or packaged solution. While it
is true that packaged solutions do have industry best practices and can typically
address stakeholder needs up front, they provide little to no visibility into the internal
black box policies or procedures that are ossified in the solution. Sometimes,
organizations start with a packaged solution and then end up spending considerable
resources to customize and change it to their needs through custom code. Thus,
organizations attempt to satisfy conflicting objectivesthe need to start quickly with
industry best practices out-of-the-box, while also needing transparency, visibility, and
agility in a consistent platform that is palatable to both business and IT.
This chapter explains how Pega iBPM solves this dilemma. All the characteristics
and capabilities of iBPM described in the previous chapters are realized through
Pegas new way of building business applications that eliminates the problems of
packaged solutions or custom coding. The compelling need to have an agile business
platform that leverages industry best practices, satisfies business objectives, and
provides visibility and control is exactly the realm of Pega iBPM, which provides the
next wave for building business applications.
Pega iBPM for Customer Centricity

Businesses are driven to innovate by rapidly introducing new products, opening
new markets, quickly adapting to customer demands, overcoming competition, and
complying with new regulations. The need to change emanates from the need to
improve process efficiency, eliminate waste, increase the percentage of value work,
and keep processes under control in order to optimize customer experiences. For
customer-centric organizations, the business objectives are aligned with customer
experience optimization. However, operationalizing customer centricity has been
a challenge for most organizations, largely because the traditional software
lifecycle is a heavy development process with long and complex requirements for
deployment. Furthermore, in conventional software development, making changes is
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arduous and error-prone. At the same time, market pressures, regulatory agencies,
global competition, and internal communication challenges drive management
to constantly evolve the rules of the business. As time goes on, these evolutionary
changes migrate further from the original intent of policies and practices, creating
greater impact and increased frequency of change.
Pega is the worlds leading iBPM solution for customer-centric business

applications. Pega has achieved this level of prominence by providing comprehensive
decision management capabilities in one cohesive platform, including a rich
collection of rule types as well as predictive, real-time decisioning for Next-BestAction marketing, sales automation and customer service and support. Pega easily
supports complex customer strategies that can involve scorecards, decision rules,
and powerful predictive and adaptive models.
In a world where managing change is now mission critical, Pega iBPM, enables
stakeholders to keep up with and control change, especially for KPIs that focus on
customer value. Pega iBPMs modern Build for Change platform provides all of the
capabilities that we have discussed in this book including:

Business Rules and Decisioning (Chapter 4)

SOA and Modernization with iBPM (Chapter 5 and 7)
Social iBPM (Chapter 6)
Mobile iBPM (Chapter 6)
Process Excellence and Improvement iBPM (Chapter 8)
Dynamic Case Management (Chapter 9)
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Transformational iBPM (Chapter 10 and 11)

Enterprise Content Modernization with iBPM (Chapter 12)
Cloud iBPM (Chapter 13)
iBPM-enabled CRM (Chapter 14)
Pega iBPM delivers four essential capabilities that allow organization to rapidly
create comprehensive, end-to-end, customer-centric solutions:

Business Profiler
Directly Capture Objectives
Situational Layer Cake
6R Case Automation with Dynamic Case Management
Business Profiler: From Business Objectives to Execution
Pegas Business ProfilerTM allows business stakeholders to align high-level,

measurable strategies to process improvement initiatives realized though Pega
iBPM. The Business Profiler engages the business and empowers them to capture
their business objectives and measurable KPIs in Pega applications. It provides an
intuitive organization of the business. Through the Business Profiler, stakeholders
can organize and map the strategies in layered, top-down hierarchies from business
objectives all the way to Pega iBPM solutions with detailed metrics, checklists, and
timelines. The contextual collaboration Pega tool, PegaPulse, aids this process,
as it can be used to conduct discussions and feedback conversations around the
strategies, goals, and objectives.
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Strategic initiatives can be operationalized through Pega iBPM technologies and

solutions. Strategiesthe layer below the overall business objectiveinvolve metrics
and measurements that are kept up to date in real time. These KPIs can be sourced
either from Pega iBPM solutions or external systems. The metrics are real-time
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measures that are obtained through standard interfaces (REST). This allows the
business stakeholder to always have up-to-date, real-time data on the performance
of their strategic initiatives. The KPIs can also be organized in various perspectives
(customer, financial, internal, and innovation/growth, as in the balanced scorecard.)46
The complete visibility into the performance of strategic KPIs, combined with the
ability to drill down from KPIs to automated and operationalized Pega iBPM solutions
and effect changes for improvement is transformational.
Directly Capturing Business Objectives
The strategies and the corresponding business solutions supporting business

strategies, which are identified using the Business Profiler, are operationalized through
Pegas Directly Capturing Objectives (DCO) constructs. DCO essentially realizes the
promise of model-driven development in which working application models are created
directly from business mandates. DCO enables far more efficient development of
solutions that directly reflect the organizations goals for customer centricity.
If business people are to own the change, they must be able to close the gap
between business objectives and operations. This requires sharing ideas with
operations and IT at all stages of an iBPM project to ensure that the solution meets
business needs. DCO is the set of capabilities in Pega iBPM that lets business users
capture, organize, and manage information directly in the system instead of using
disconnected documents or artifacts that are out-of-date or obsolete before the
solution is even delivered.
See for example: https://www.balancedscorecard.org/
46
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Pre-built case types, forms, and models for process and business-rule logic make
it easy for business users to define processes, rules interfaces, new case types
and the other essential elements of a solution. This business-focused approach
solves the problems of traditional development methods as Pega iBPM enables
seamless integration of business objectives in new and evolving solutions; provides
business, IT, and operations with full transparency and visibility into all the elements
of a business solution; and delivers a thin-client (browser-based) platform as the
common language. The unified environment automatically generates the solution
from requirements without cumbersome hand-offs, imports and exports between
tools, conversion to execution environments, or rebuilding details in multiple
environments. Change is fast, but controlled; continuous, but orchestrated.
As a result, DCO helps avoid requirements gaps introduced in custom software

projects, where business intent is often misunderstood, technical changes obsolete
requirements, business needs change during long delivery times, and the business
does not have any opportunity to see or provide feedback on the application until it is
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too late. All these challenges are avoided with DCO, which is accessible to business
owners, analysts, designers, and developers. Process maps are easily designed with
the Web-based process modeling tool; changes are reflected consistently; and there
is never the need for translation, to make a change. Changes and prior versions are
automatically tracked, and accesses, as well as change permissions, are controlled
for complete application governance.
There are several constructs in Pega iBPM that allows organizationsboth the
business and ITto capture their objectives. These include stage-based case design
(discussed below), high-level process diagrams, easy-to-use forms for business
rules, and of course, more detailed process flow diagrams with built-in, extensible
shapes. Pega is 100% model drivenwhat you model is what you execute and
automate. Because Pega iBPM provides accelerators, wizards and visual forms to
define application assets in business terms, all aspects of business requirements
are modeled and executed directly in the shared environment. Pega solutions can
be created and changed using any agile or iterative methodology the enterprise may
have adopted.
In addition, business stakeholders can generate documentation as needed during the
life of a Pega iBPM solution. Through Pegas innovative continuous documentation
feature, the requirements document of the solution can be automatically generated
from the directly captured models for processes, case types, business rules, UI, and
so forth at any time in the process, showing all aspects of the application from
requirements and policies and procedures to user interfaces, case models, and
integration. Because this documentation is generated directly from the rules on
demand, it is always up-to-date and in sync with the actual implementation.
Specialize at Run-Time: Situational Execution
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Organizations can respond rapidly to marketing pressures using Pegas unique

and patented situational layer cake (SLC), which allows businesses to easily
introduce change and specialize for particular situations. Through SLCs
run-time specialization, organizations can execute policies and procedures
contextually to individualize the treatment for each customer. Pega maintains
all the SLC assets developed for enterprise applications (process flows,
business rules, decisions, UI, integration, etc.) in its robust and dynamic multidimensional repository.
Why SLC? Business applications execute within a context or business intent, such
as the type of customer, location, or specific product. There is always a context, and
leveraging this context enhances the quality and efficiency of the interaction. With
context, the best policy, offer, user interaction, or information source for a given
situation can be identified and executed.
The Pega iBPM platform reflects the way people manage situations in business,
using the context and business intent to drive the process. The core of Pega
iBPM is the enterprise repository of the assets for the business application, such
as processes, decision rules, constraints, expressions, user interactions, and
integration. Pega iBPM supports:
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Optimized reuse of assets so that certain policies and procedures can be

shared across lines of businesses or within the enterprise;
Specialization of assets for specific types of customers, geographical
locations, or products and services; and then
Automatic situational execution of the most appropriate specialized asset
(policy or procedure) for a given situation.
Out-of-the-box, the repository supports versioning, auditing, access control, testing,
search, navigation, and processes for managing change. Using this repository,
an organization can create common policies and procedures, and then add
specialization layers for specific situations that allow it to treat different customers
differently. Pega iBPM makes it easy to reuse, specialize, and then situationally
execute for a given business scenario or interaction.
For example, when a customer service organization needs to add variation to
accommodate a new product group, line of business, or channel, it only needs
to build the deltas on top of the Pega iBPM foundational policy and procedure
layers, which are already defined. There will be standard discount policies that are
the default across all products, jurisdictions, or customers. Then, there will be
specializations of the discount policy. For instance, a different discount calculation
could be expressed as a specialization to reflect a certain type of the customer or
state regulation, enabling change to be easily managed.
Pega calls this run-time specialization and it achieves contextual execution through
Pegas situational layer cake where sets of policies and procedures are built as
layers on top of one another. Each layer inherits business logic from the lower layers.
Pega iBPM dynamically selects and executes the most specialized policies and
procedures from the layer cake based on the situation.
This unique layering capability is at the core of the Pega iBPM architecture, and runtime specialization is a revolutionary approach that eliminates the need for extensive
coding or manual human intervention to handle the exceptions that are so often
the rule. Instead, a simple specialized layer captures the rules for each particular
situation and automatically executes them with the situation is right.
6R Case Automation with Dynamic Case Management

At the very core of Pega iBPM is automation of the work to handle cases from endto-end. Pega iBPM achieves this through receiving work from multiple channels,
routing it to the most qualified resources, and reporting on it through monitoring
actionable reports. Via its intelligent and unified business rules and decisioning
capabilities, Pega solutions support researching for just-in-time information,
responding, and resolving the dynamic cases. Pega calls this 6R case automation.
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Recognized by analysts as the leading dynamic case management platform, Pega

iBPM supports dynamic work automation in business applications from end-to-end
through its 6R work automation capabilities. Pega iBPM also supports all types
of workers including clerical workers, knowledge-assisted workers, and knowledge
workers. More importantly, Pegas dynamic case management adapts to the way
the business defines and monitors its milestones and progress. Leveraging the
situational layer cake, it dynamically tailors each task or interaction of the case,
and supports dynamic case content, as discussed in Chapter 9. The case work
gets resolved by automating wherever possible and guiding users when human
involvement is needed. For example, a Pega solution can automate correspondence
generation to minimize effort and ensure consistency. It can support the definition,
subscription, and robust handling of business events. A Pega iBPM application can
also keep track of all the business activities and allow business users to drill down
to control the performance of the solution.
Of key importance is Pegas ability to automate structured and predetermined
processes, as well as ad-hoc tasks, executed in the context of dynamic cases. The
events, responses, and resolution of the case are all automated through the
Pega iBPM solution.
Pega dynamic case management supports:
Case Lifecycle Management for Business Stakeholders: Case Lifecycle
Management mirrors the way business people think, defining work in terms of
milestones towards a strategic objective. Pega calls these stages and allows the
business to directly define the stages, as well as all the processes that need to
be executed for the stage. This unique and innovative design allows business
stakeholders to organize their cases into distinct milestones.
Consider the stages required when onboarding a new employee. For each stage,
there are sub-cases or processes and corresponding tasks that need to be
executed and completed. The transition from one stage to the next can be done
automatically or manually by the case manager or worker. These are clearly
depicted in the stage design. For example, when a chevron arrow icon is used to
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represent moving to another stage, it means the system will automatically

transition the case from this stage to the next one once all of the first stages
processes and tasks are completed. If there is a straight line between two stages,
it means the transition is done manually by the case worker.
Processes pertaining to milestones or stages are easily designed by the business.

Some of these processes or sub-cases will be executed sequentially. Others will
be done in parallel. The stage definitions and transitions are simple and intuitive,
yet powerful and complete. For instance, for each stage you can define the
conditions, validation, and the policies to transition from one stage to the next.
Examples of validation requirements include specific documents that need to be
attached to the case, specific approvals, completion of specific processes, or just
about any condition that makes sense to the business. The details of the process
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and the organization of processes in the case hierarchy can be completed by

business analysts and process architects. Pega provides an outline of the
processes involved in a case stage, ready for the next level of details of the
process flow. The business analyst can design additional details of the process
using either the shapes provided by Pega iBPM, or customized smart shapes to
provide various reusable utilities to the process modeler.
Hierarchical Case Design: Dynamic cases are hierarchical. A parent case can
have child sub-cases. There will be processes in each subcase that will generate
tasks assigned to case workers. The details of the case types are captured
and designed directly through Pegas DCO capabilities. The case type designer
supports modeling the case hierarchy, the processes of each case type, and their
dependencies. The designer also allow the definition of the roles and parties who
will be performing the work, as well as the policies and procedures for each step,
any external data sources or services that will be used in the case, and all the
requirements for the case type.
The Case Portal: For handling actual cases, Pega automatically creates a case
portal where case workers and managers can view and analyze dynamic, realtime and actionable reports on case timeliness, completion throughput and
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the performance of various case workers. The same stage metaphor used in
designing case types is presented to case workers and managers to show them
how their work fits into the context of the overall case. The user has a 360-degree
view of each case with several levels of detail, allowing users to view specific
milestones or stages they have achieved and tasks that are still to be completed.
The case portal is social-enabled through PegaPulse so that case workers can
collaborate to resolve potential issues with specific cases.
Social Enablement: Through the Pega social networking capability PegaPulse,

various roles in Pega iBPM solutions can collaborate via discussions, sharing
documents, and even creating ad-hoc tasks or instantiating cases dynamically
through the collaboration portal. The social networking capabilities are available
in all phases of Pega iBPM solutions during both design and execution.
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Mobile Enablement: Pega provides extensive mobile iBPM capabilities to support

mobile workers who can monitor and resolve cases. Pega applications are
standards-based (HTML 5 + CSS 3 + JS) and provide design-once, run-anywhere
capabilities to handle different operating systems, browsers, screen sizes and
devices. Pega Mobile provides rich and comprehensive capabilities including
support for signatures, audio attachments, QR and barcode scanning, as well as
integration with third-party tools. Pega supports responsive web design (RWD)
for mobile devices (as discussed in Chapter 6) to provide all of the Pega iBPM
capabilities including tasks, cases, reports and charts. Pega Mobile also supports
native mobile capabilities, such as the camera to snap and include pictures in
dynamic cases or GPS to provide geo-based work assignment.
Ad-hoc Tasks and Dynamic Process Discovery: In addition to planned processes,

Pega supports unplanned, dynamic and ad-hoc tasks and processes. Through
Pegas design by doing capabilities, a case manager can design a case type
from an existing case instance and save it as a new case type so that changes to
best practices are captured immediately for reuse.
Guided Interactions and Next-Best-Action: Through Pega, policies and
procedures become automated processes that guide the interaction of the
worker. On browsers or mobile devices, the intelligence of real-time decisioning,
situational business rules, as well as predictive and adaptive models assist the
case worker with intuitive and targeted interactions. Contrast this to the typical
business application that requires intense training and often cryptic or complex
forms, multiple screens, manual perusing, and other wasteful activities that
workers need to engage in to get their job done.
193
Data and Documents from Multiple Internal and External Systems: Pega
supports the CMIS standard discussed in Chapter 12. Pega is also a service
producer and consumer with a very rich collection of connectors and services,
including the Pega Process Extenders for SAP and Salesforce.com.
194
Chapter 15
Federated Case Management: In addition to its extensive Process Extender and

service integration capabilities, Pega has pioneered federation of distributed
cases, including the ability to create and view remote cases. These cases are
accessed and used seamlessly via a unified case desktop and a central federated
case repository.
Monitoring and Continuously Improving Dynamic Case Solutions: As
automated cases execute, the business stakeholders can monitor and
introduce change dynamically. As work progresses and cases are processed,
the stakeholders can make changes that keep processes under control in
real time in order to meet business objectives. Pega iBPM provides dozens of
out-of-the-box reports, and Pegas industry frameworks provide even more for
specific industries and functions.
Prebuilt and custom-built reports can be organized, browsed, searched, and run
from the report browser which provides intelligent drill down, aggregation, and
pivot table behavior. In addition, the business-friendly browser lets designers
create complex reports in seconds, selecting data from work tables and external
systems. Users can easily customize, save, and share reports with title, column,
filter, and sorting changes.
Pega iBPM for Optimizing Customer Experiences in

Adaptive Enterprises
Pega iBPMs advanced analytics capabilities are designed to take the guesswork out
of customer relationships. It accurately determines which people are going to be
your best customers, what they are likely to want, how they will react to a particular
offer, and how you can best align customer desires with business objectives.
195
Pega provides a complete suite of iBPM-enabled CRM capabilities including

Pega Next-Best-Action Marketing, Pega Sales Force Automation, and Pega for
Customer Service. Each of these CRM components offers all of the Pega iBPM
features we have described here, such as automation of processes, dynamic
cases, rich collection of rule types, analytics for decisioning, and support for both
social and mobile.
For example, Pega for Customer Service provides an intuitive contact center desktop
that guides service representatives through every step of a customers case. In these
interactions, Pega retrieves the situational scripting to make sure the right policies
and procedures are consistently communicated to the customer. Decisioning models
using predictive and adaptive analytics are leveraged in real time to anticipate the
customers needs, recommend the Next-Best-Action, and even suggest a relevant
and timely offer, when appropriate. The Pega service solution provides unified
channel management, including telephony integration, e-mail, chat, Web selfservice, mobile, and social media monitoring and response that allows customers
to start in any channel and seamlessly transition to another without losing context.
Furthermore, Pega allows business users to simulate and test the potential impact
of complex customer strategies before putting them into production. Once deployed,
performance can be monitored and controlled at any level of operation, in real time.
Pega Next-Best-Action Marketing is an important milestone in the evolution of
marketing automation software. The solution addresses marketing execution gaps by
enabling organizations to focus on the customer and the customer lifetime value
versus product-centric marketing. Real-time decisioning leverages predictive and
adaptive analytics to balance the individual customers needs with business
objectives and determine the Next-Best-Action. As decisions can be executed over
multiple channels, marketing becomes much more consistent across channels.
196
Chapter 15
Pega Next-Best-Action Marketing reverses the traditional product/company-centric

approach that pushes a product or serviceoften in bulkto all existing and
potential customers, regardless of the relevance of the offer. Pega attempts to
optimize the value of each offer for each customer by personalizing the
recommendations. Pega Next-Best-Action Marketing leverages predictive and
adaptive models to add intelligence and relevance to offers by determining which
customers are very likely to be interested. Thus, marketing actions depend on
multiple very specific factors, such as the products owned by the customer,
demographics, the history of the customer with the business, their potential lifetime
value, and response to previous offers. This one-to-one approach to marketing
enables organizations to optimize the customer experience. For instance, the focus
for new customers can be on promoting products or services that help customers
discover value from the company. For existing customers, specific and personalized
up-sells and cross-sells can be offered that take into consideration what is known
about the individual, such as age or location, and the history of the individuals
relationship with the business.
Pega Next-Best-Action Marketing also supports real-time analytics and adaptive
decisioning. Traditional marketing is often reactive, and it can takes weeks or even
months to assess the impact of a marketing campaign. Pega leverages businessfriendly analytical tools to explore the effectiveness of campaigns and offers
immediately. This visibility into effectiveness across channels, customer segments and
products could influence, for instance, which products should be marketed more than
others, and in which regions. Furthermore, through adaptive analytics, the marketing
solution continuously learns and adapts the campaigns or Next-Best-Action offers.
It listens to customer decisions on offers, examines the outcomes, and adapts. The
feedback from this automatic and adaptive learning can immediately influence the
decisions on a campaign or offer for specific customers or segments of customers.
197
Why Pega iBPM: The 1080 High-Definition (HD) Panorama
In his seminal book Customerpocalypse,47 Alan Trefler, the founder and CEO of
Pegasystems Inc., provides a vision of the next-generation customers who are
increasingly demanding to be in control. This is the era of a new generation of
consumers: Generation D (Gen D) as Trefler defines it. Ignoring Gen D customers
can put organizations at peril, as these are consumers who leverage social media
and other channels to voice their opinions on the products and actions of a business
with the goal of influencing the behavior of others. Gen D is determined to take viral
reaction to the extreme.
Marketing to, selling to, and servicing this emerging generation of consumers
requires a 1080 high-definition (HD) panorama of the customer. What is a 1080 HD
panorama? Briefly, it puts each customer in high definition using three perspectives:
360 Data View: This creates a holistic understanding of the customer from
a data perspective. It puts the customer in the center and gathers all the
data about that individual to provide the what about the customer.
360 Intent View: The next perspective addresses the what and the why the
personality of the customer. Why does the customer come to you and what
do you want to achieve with this customer? The what and why represent the
intent of the customer.
Trefler, Alan (2013). Customerpocalypse. Cambridge, MA: Pegasystems Inc.
47
198
Chapter 15
360 Process View: The last perspective is the customer process view. This
perspective addresses the when, the where and the how, and is the most
important action part of the 1080 HD customer panorama.
In order to achieve a 1080 HD panoramic view, you need a complete, holistic iBPM
platform with all the capabilities described in this book. Pega is that platform. We began
this book talking about the various business improvement methodologies, as well as
process automation technologies, that are culminating in the adaptive enterprise. As
we have seen, the accelerating pace of change means that the traditional methods for
building solutions, such as custom, in-house coding and pre-built, packaged solutions,
cannot keep up. The demand for change requires new ways of building business
solutions as it is clear traditional approaches with stacks or packaged applications kill
agility and thwart the adaptive, customer-centric enterprise.
Adaptive enterprises are responsive to change. The 1080 HD panorama enables
them to manage change and address the requirements of Generation D consumers.
Through Pega iBPM, enterprises are able to innovate and continuously improve
without disruptionits like being able to change the oil that runs the business
while the engine is still running. This is quite a tall order, but through Pega iBPM,
many Fortune 500 companies are making it a reality. Pega iBPM enables adaptive
enterprises to leverage the amazing power that predictive analytics brings to
business processes. It also exploits adaptive models to continuously learn and
optimize, helping organizations discover models that can be enacted and deployed as
robust business process solutions that can continuously improve. Perhaps the most
important characteristic of an adaptive enterprise is to Think big, but start small.
Pegas approach is to start with small projects that can quickly generate value,
succeed with them, radiate to additional sliver projects, and eventually transform the
entire business into an adaptive enterprise.
Pega enables the adaptive enterprise to focus its efforts on building customercentric solutions. One of the key ways Pega supports customer centricity is by
providing the 1080 HD view of your customer. Pega is the only intelligent BPM
platform that combines the 360o view of customer data with a 360o view of the
business rules and decisions that represent the intent of the customer and the
business, and a 360o holistic view of dynamic cases executed from end-to-end
through the process. With this holistic 1080 HD panorama, details about the
individual customer become clearer and intent is better understood. This clarity
then enables the business to optimize the customer experience.
Most importantly, change becomes manageable by:
Empowering business units, where business people can directly capture
their objectives, design, change, and execute efficient processes, benefiting
the customer.
199
Fostering innovation, where organizations can launch new products and

services quickly, and expand solutions globally by reusing and specializing
business process assets in order to treat different customers differently.
Enabling end-to-end dynamic case automation to handle collaboration and
ad-hoc changes while eliminating costly, unnecessary work.
Promoting business transformation by wrapping and renewing existing
legacy systems.
Delivering great customer experiences by leveraging predictive and
adaptive analytics.
Pega iBPM helps adaptive enterprises optimize the customer experience and
automate operations. Its Build for Change technology empowers business people
to create and evolve their critical business systems.
Pega iBPM is for customer-centric business applications.
It is the Next Wave for transforming adaptive enterprises. The journey begins...
200
Chapter 15
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References
INDEX
360 Data View.................................................................................................................198
360 Intent View...............................................................................................................198
360 Process View...........................................................................................................199
Adaptive Analytics.......................................................................................... SeeAnalytics
Adaptive Enterprise
addressing execution gaps.......................................................................................20
and Pega...................................................................................................................196
emergence of.............................................................................................................19
high-definition panorama.......................................................................................198
Agile methodology
definition...................................................................................................................129
for continuous improvement....................................................................................46
iBPM methodologies...............................................................................................130
iBPM platform..........................................................................................................133
quick win..................................................................................................................130
reusable assets........................................................................................................135
SCRUM.....................................................................................................................133
support for..................................................................................................................73
waterfall methodology............................................................................................133
Alignment
IT/Business..............................................................................................39, 40, 49, 72
Analytics
adaptive..............................................................................................................59, 172
and adaptive enterprise............................................................................................26
and social networking...............................................................................................84
in CRM................................................................................................................60, 172
Next-Best-Action.....................................................................................174, 181, 193
predictive............................................................................................58, 172, 174, 175
repeatable patterns...........................................................................................85, 175
self-learning..............................................................................................................59
use in CRM.................................................................................................................60
Assets, reusable..........................................................................................SeeRepository
Big-bang projects.................................................................92, See alsolegacy systems
Business activity monitoring
benefits of...................................................................................................................36
in Lean......................................................................................................................111
with Pega..................................................................................................................195
with social networking..............................................................................................82
Business objectives
modeling....................................................................................................................45
205
need for......................................................................................................................44
Business rules
declarative..................................................................................................................54
definition of.................................................................................................................26
in Next-Best-Action...................................................................................................36
in processes...............................................................................................................28
types...........................................................................................................................53
unified with processes...............................................................................................39
use in processes........................................................................................................54
Case.......................................................................................See alsoCase Management
and enterprise content management....................................................................150
definition of...............................................................................................................119
lifecycle.....................................................................................................................124
stages in...................................................................................................................189
structured.................................................................................................................120
swim lanes...............................................................................................................120
unstructured............................................................................................................121
Case management...................................................................................... See alsoCase
6R case automation using Pega.............................................................................188
agility........................................................................................................................118
and enterprise content management....................................................................155
and knowledge workers..........................................................................................122
design by doing........................................................................................................118
dynamic context.......................................................................................................123
dynamic, definition of..............................................................................................117
exception handling...................................................................................................118
improving customer experience...............................................................................31
in Lean......................................................................................................................108
lifecycle.....................................................................................................................124
use in social networking.........................................................................................118
Center of Excellence
governance.................................................................................................................48
need for......................................................................................................................46
role in modernization................................................................................................94
Choreography.....................................................................................................................72
Cloud
definition...................................................................................................................160
effect on mobile computing......................................................................................78
Infrastructure as a Service (IaaS)...........................................................................162
Platform as a Service (PaaS)..................................................................................162
Software as a Service (SaaS)..................................................................................163
when to use..............................................................................................................164
with iBPM.....................................................................................................26, 86, 164
Collaboration
206
Index
asynchronous.............................................................................................................78
context of with iBPM..................................................................................................83
synchronous...............................................................................................................78
using mobile devices...........................................................................................26, 78
via cloud......................................................................................................................78
Content
metadata..................................................................................................................152
structured.................................................................................................................154
unstructured............................................................................................................154
Context
and business intent...........................................................................................57, 187
dynamic, in cases....................................................................................................123
of collaboration..........................................................................................................82
Continuous improvement
methodology..............................................................................................................46
Critical-to-quality measure........................................................112, See alsoSix Sigma
CRM............................ SeeCustomer relationship management, customer experience
Customer experience
analytics, use of.......................................................................................................174
customer gap...........................................................................................................144
high-definition..........................................................................................................198
situational execution.................................................................................................34
through Next-Best-Action................................................................................36, 174
transformation...........................................................................................................31
with Pega iBPM................................................................................................179, 200
Customer relationship management
definition...................................................................................................................170
Net Promoter Score................................................................................................169
Next-Best-Action.....................................................................................................174
with iBPM.................................................................................................................172
Customer relationship mangement............................... See alsoCustomer experience
design by doing................................................................................................................119
Direclty capture objectives
modeling tools.................................................................................................181, 182
Directly capture objectives............................................................ See alsoPegasystems
business benefits.......................................................................................................36
Lean..........................................................................................................................110
Pega capability.........................................................................................................181
Dynamic Case Management................................................ See alsocase management
Enterprise architecture
application architecture..........................................................................................141
business architecture..............................................................................................140
customer-centric.....................................................................................................176
definition of.........................................................................................................28, 140
207
information architecture.........................................................................................141
infrastructure architecture.....................................................................................141
models......................................................................................................................140
Enterprise content management
document metadata................................................................................................151
lifecycle.....................................................................................................................149
social network content............................................................................................155
with dynamic case management...........................................................................150
Enterprise repository...................................................................................SeeRepository
ESB................................................................................. See alsoEnterprise service bus
Execution gaps...................................................................................................................20
Governance
categories of..............................................................................................................48
need for in legacy modernization.............................................................................95
requirements.............................................................................................................98
Guided interaction
automating with iBPM...............................................................................................35
for knowledge workers............................................................................................118
with Pega..................................................................................................................193
High-definition
use of in customer experience...............................................................................198
iBPM
analytics....................................................................................................................174
application rationalization.........................................................................................99
context........................................................................................................................57
customer centric.....................................................................................................176
definition of.................................................................................................................19
dynamic case management...........................................................................122, 146
enterprise architecture...........................................................................................140
enterprise content management...........................................................................149
for cloud computing................................................................................................159
for continuous improvement....................................................................................41
for CRM....................................................................................................................169
for PaaS....................................................................................................................163
for SaaS....................................................................................................................163
intelligence...........................................................................................................21, 27
just-in-time invocation..............................................................................................73
Lean....................................................................................................................41, 105
legacy system modernization...................................................................................91
management..............................................................................................................25
mobile computing......................................................................................................86
model-driven development.....................................................................................133
modernization phases.............................................................................................101
Next-Best-Action.....................................................................................................174
208
Index
optimizing customer experience....................................................................169, 173

Pega platform..........................................................................................................179
performance management.......................................................................................56
process automation...................................................................................................23
projects, pitfalls.........................................................................................................46
relationship to SOA....................................................................................................70
reusable assets........................................................................................................136
situational execution...........................................................................................25, 57
Six Sigma..........................................................................................................105, 111
social networking......................................................................................................77
structured, unstructured work...............................................................................120
suite............................................................................................................................23
system........................................................................................................................19
transformation platform...........................................................................................38
work automation........................................................................................................23
Intelligence
definition of in iBPM..................................................................................................26
process.......................................................................................................................28
situational...................................................................................................................57
Intent
driven interactions...................................................................................................118
role of in iBPM...........................................................................................................57
Internet of Everything........................................................................................................26
IT
business collaboration............................................................................................133
business-IT gap.................................................................................................20, 144
common language with business..............................................................39, 40, 133
shadow.......................................................................................................................99
using Directly Capture Objectives..........................................................................184
Knowledge-assisted workers
and dynamic cases..................................................................................121, 122, 123
Lean
agile methodology.............................................................................................41, 135
definition...................................................................................................................105
lead time...................................................................................................................106
process efficiency........................................................................................27, 35, 106
Legacy systems
causes for modernization failure.............................................................................92
modernization phases.............................................................................................101
modernization with iBPM..........................................................................................96
modern programming languages............................................................................93
need for governance..................................................................................................94
reasons to modernize...............................................................................................91
role of CoE..................................................................................................................98
209
think big, start small projects...................................................................................95

wrapping systems......................................................................................................97
Methodology
agile..........................................................................................................................130
and CoE......................................................................................................................98
continuous improvement..........................................................................................46
elements of................................................................................................................46
iterative.......................................................................................................................73
Lean Six Sigma..........................................................................................................57
Mobile computing
and iBPM....................................................................................................................86
collaboration..............................................................................................................77
Pega mobile.............................................................................................................193
use in the enterprise.................................................................................................77
Modeling
business objectives....................................................................................................45
model-driven development.....................................................................................133
unified platform with execution................................................................................45
use of..........................................................................................................................20
Modernization......................................................................................Seelegacy systems
Multi-channel
consistency...............................................................................................................102
effect on customer experience.........................................................................33, 174
Net Promoter Score..........................................................................................27, 114, 169
Next-Best-Action
in CRM......................................................................................................................172
Pega Next-Best-Action marketing.........................................................................197
to optimize customer experience...........................................................................174
Object-oriented programming
compared to iBPM.....................................................................................................38
history of.....................................................................................................................38
Orchestration
definition.....................................................................................................................72
process, services.......................................................................................................72
Pegasystems
6R case automation.................................................................................................188
adaptive enterprise..................................................................................................199
Build for Change platform......................................................................................179
business activity monitoring...................................................................................195
Business Profiler.....................................................................................................182
continuous documentation.....................................................................................186
Directly Capture Objectives.....................................................................................184
dynamic case management...................................................................................188
high-definition panorama.......................................................................................198
210
Index
Next-Best-Action Marketing...................................................................................196
Pega for customer service..............................................................................196, 197
Pega Mobile.............................................................................................................193
PegaPulse................................................................................................................192
Pega Sales Force Automation................................................................................196
productivity study.......................................................................................................39
reporting...................................................................................................................188
run-time specialization...........................................................................................188
situational execution...............................................................................................187
situational layer cake..............................................................................................187
Performance management
and KPIs.....................................................................................................................57
Lean Six Sigma..........................................................................................................57
Platform
enterprise repository.................................................................................................40
unification...................................................................................................................39
Predictive Analytics.........................................................................................Seeanalytics
Process automation
6R case automation.................................................................................................188
exception handling.....................................................................................................97
guided interactions....................................................................................................35
history of.....................................................................................................................28
human participation..................................................................................................97
straight-through........................................................................................................35
unified with business rules.......................................................................................39
use of business rules................................................................................................28
Process improvement
history of.....................................................................................................................27
participants................................................................................................................28
Process of Everything........................................................................................................29
Repository................................................................ Seerepository in agile methodology
asset layers..............................................................................................................136
in Lean......................................................................................................................116
IT value.......................................................................................................................40
reuse of assets...........................................................................................................73
situational assets.....................................................................................................136
Reuse
of corporate assets....................................................................................................73
Run-time specialization..................................................................................................188
SCRUM.............................................................................................................................132
Serivce-oriented architecture.............................................. See alsoagile methodology
and enterprise architecture....................................................................................145
big-bang projects.......................................................................................................92
composite applications.............................................................................................68
211
enterprise service bus...............................................................................................68

registry........................................................................................................................68
relationship to iBPM..................................................................................................69
standards...................................................................................................................67
Service-oriented enterprise
and modernization...................................................................................................101
culture of....................................................................................................................69
definition.....................................................................................................................65
Situational execution
contextual execution..................................................................................................57
in customer experience.............................................................................................34
run-time specialization...........................................................................................188
situational layer cake..............................................................................................186
Situational intelligence...............................................................Seesituational execution
Situational layer cake.................................................................Seesituational execution
Six Sigma
agile methodology...................................................................................................134
critical-to-quality measure.....................................................................105, 112, 116
definition...................................................................................................................111
DMAIC.......................................................................................................................112
iBPM capabilities.....................................................................................................115
real-time...................................................................................................................115
Slivers.................................................................................................................................25
SOA............................................................................... SeeService-oriented architecture
Social networking.......................................................................... See alsocollaboration
continuous improvement..........................................................................................81
in business activity monitoring.................................................................................82
monitoring channels.................................................................................................87
PegaPulse................................................................................................................192
synchronous/asynchronous......................................................................................78
types of enterprise projects......................................................................................83
using analytics...........................................................................................................84
using dynamic case management.........................................................................119
Web 2.0.......................................................................................................................80
SOE.................................................................................. SeeService-oriented enterprise
Straight-through processing............................................................................................35
Voice of the network..................................................................80, Seesocial networking
Web 2.0...............................................................................................................................77
Work automation
6R work automation................................................................................................189
definition.....................................................................................................................23
in Lean......................................................................................................................108
212
Index
About Pegasystems
Pegasystems, the leader in business process management and software for
customer centricity, helps organizations enhance customer loyalty, generate new
business, and improve productivity. Our patented Build for Change technology
speeds the delivery of critical business solutions by directly capturing business
objectives and eliminating manual programming. Pegasystems enables clients
to quickly adapt to changing business conditions in order to outperform the
competition. For more information, please visit us at www.pega.com.
Copyright 2014 Pegasystems Inc. All rights reserved. PegaRules, Process Commander,
SmartBPM and the Pegasystems logo are trademarks or registered trademarks of Pegasystems Inc. All other product names, logos and symbols may be registered trademarks of their
respective owners.
For over two decades, Dr. Khoshafian has articulated a clear vision for the business
consequences of emerging technologies. His latest book sets the bar even higher, by pulling
together all the pieces of intelligent BPM and explaining them the context of a rapidly
evolving mobile, social and cloud based business environment. A must read for all managers
and executives seeking competitive advantage.
Nathaniel Palmer, Editor in Chief, BPM.com
In this easy to read and understand book, Dr. Khoshafian persuasively lays out the case to
organizations of all types regarding the integrative capabilities of intelligent business process
management (iBPM). From service integration to content management, business rules to
mobile/social, lean-six-sigma to agile process development, Khoshafian shows how these are
inter-related facets of the next wave in process thinking. If youre seeking to achieve
sustainable competitive advantage through agile execution, you want to read this book.
Dr. Richard J. Welke Ph.D., Director, Center for Process Innovation and Professor of Computer
Information Systems, Robinson College of Business, Georgia State University (Atlanta, GA).
Dr. Khoshafians book provides an excellent exposition of how intelligent BPM can become a
core enabler for business transformation. It gives a clear understanding of how emerging
trends such as social, mobile, dynamic case management, the cloud, and real-time
decisioning are playing a key role for agencies that want to adapt, while cutting costs and
being increasingly responsive to their stakeholders. Fitting and leveraging iBPM from
business enablement to business architectures with clear practical examples makes an
excellent read for organizations that are on a business transformation journey.
Douglas Averill, State of Maine, Director Business Process Management
About Pegasystems
Pegasystems revolutionizes how leading organizations optimize the customer experience and automate
operations. Our patented Build for Change technology empowers business people to create and evolve their
critical business systems. Pegasystems is the recognized leader in business process management (BPM) and
is also ranked as a leader in customer relationship management (CRM) software by leading industry analysts.
Copyright 2013 Pegasystems Inc. All rights reserved.

All trademarks are the property of their respective owners.

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What is the book about?

What is the book about?

What are some of the endorsements for the book?

What are some of the endorsements for the book?

Nathaniel Palmer, Editor in Chief, BPM.

Copyright 2013 Pegasystems Inc. All rights reserved.

DR. SETRAG KHOSHAFIAN

INTELLIGENT BPM THE NEXT WAVE FOR CUSTOMER-CENTRIC BUSINESS APPLICATIONS

FOR CUSTOMER-CENTRIC BUSINESS APPLICATIONS

DR. SETRAG KHOSHAFIAN

DR. SETRAG KHOSHAFIAN

2014 Pegasystems Inc.

iBPM: The Next Wave for Customer-Centric Business Applications

Pitfalls That Prevent iBPM Success......................................................................... 50

Chapter 7 - Legacy Modernization through iBPM.................................................. 91

iBPM: The Next Wave for Customer-Centric Business Applications

Chapter 11 - iBPM: The Core of Modern Enterprise Architectures..................... 139

Chapter 15 - Pega iBPMThe Next Wave for Customer-Centric Business

iBPM: The Next Wave for Customer-Centric Business Applications

iBPM: The Next Wave for Customer-Centric Business Applications

iBPM: The Next Wave for Customer-Centric Business Applications

ABOUT THE AUTHOR

iBPM: The Next Wave for Customer-Centric Business Applications

iBPM: The Next Wave for Customer-Centric Business Applications

Why iBPM and not iBPM Suite or System?

Process Execution and State Management Engine

iBPM: The Next Wave for Customer-Centric Business Applications

Policies and Procedures

iBPM: The Next Wave for Customer-Centric Business Applications

Legacy Code: Another source of policies and procedures is legacy

Today, organizations are increasingly facing pressures to change and respond

Business: The B in iBPM

Business Objectives: Businesses have objectives. These are often measurable

Business Requirements: Businesses have requirements that need to be

Process: The P in iBPM

iBPM: The Next Wave for Customer-Centric Business Applications

Management: The M in iBPM

Managing Business Solutions with Agility and Continuous Improvement:

worksocially, collaboratively, responsivelyand can include many participants

The Evolution of iBPM

iBPM: The Next Wave for Customer-Centric Business Applications

Process Automation: Automation has also evolved from structured production

that have influenced the evolution of iBPM include Enterprise Application

Process of Everything6: The Internet of Everything (IoE) is the most important

Cisco (2013). Internet of Everything.http://www.cisco.com/web/about/ac79/innov/IoE.html

iBPM: The Next Wave for Customer-Centric Business Applications

will become increasingly pervasive. iBPM is about automation involving

See Agent Technology: An Overview by James Odell, http://www.jamesodell.com/Agent_

Benefits for Customers: Transforming the Customer Experience

iBPM: The Next Wave for Customer-Centric Business Applications

companies to vocal customers, empowered especially through social media

social media, it is the responsibility of the enterprise to continuously monitor

Holistic, Ad-hoc and Dynamic Cases to Readily Handle Customer Needs: In

iBPM: The Next Wave for Customer-Centric Business Applications

Optimizing Operations: Benefits for Operators

Automated Straight-Through Processing: Traditional work processing

iBPM: The Next Wave for Customer-Centric Business Applications

Benefits for the Business