Last Posting...

It has been many months since my last posting and a lot has happened in that time. This will be my last post on "Good Karma for Enterprise Software." I have turned my focus towards Software as a Service and joined Eloqua Corporation. Eloqua pioneered the space for on-demand marketing automation and lead generation. Specifically, we help B2B marketers execute, automate, and measure effective marketing programs that drive revenue.

• Drive revenue through more qualified sales-ready leads
• Boost marketing effectiveness
• Demonstrating value and accountability
• Increase efficiency and professionalism through automation
• Align marketing and sales

To learn more about Eloqua and how we are helping our customers drive revenue, and accelerate sales cycles, while increasing deal sizes and and close rates, please visit us at: http://www.eloqua.com/customers/customers.asp

Also, be sure to check out The Innovative Marketer blog. It is a great resource for all things B2B Marketing. I have not yet decided whether to start another blog, but if I do, I will be sure to link it back here. I hope you have enjoyed reading this blog as much as I enjoyed contributing to it.

Sincerely,

David

Back to Business - Part III - Final

So how can this insurance company resolve their complex process problems? There are a few critical components:

1) Recognize there is a problem and gain executive-level support
2) Determine the current level of process efficiency
3) Identify where you want it to be along with appropriate metrics, recognizing that change does not happen overnight
4) Select software that can help manage the workload better and ensure business goals are met
5) Roll-out the solution in a high value area to learn how best to leverage the software, obtain a quick win, gain support, and use that to shop around to other departments to get them excited
6) Monitor progress and revisit the processes to further optimize and tweak them for optimal efficiency

With a well-planned implementation, commitment, and the right software, they will be ideally positioned to achieve their goals. In this case, they wish to turn around quotes 96% faster and applications 85% faster.

It is nearly impossible to achieve these goals, or any process goals for that matter, consistently by manually directing workload allocation. Even with a basic workflow system, while it will likely improve efficiency over manual processes, it cannot "adjust the levers" to distribute the workload according to your key performance indicators (KPIs). That is why they need to ensure that their Business Process Management (BPM) solution can automatically distribute workload according to the business goals. When this happens, rather than seeing intense peaks and valleys in work completion, due to the over/under compensation that a manager will go through when tasked with manually controlling workload allocation, performance is much more smooth, steady, and predictable.

In addition, we all know that the constant in business is change. And it is happening at a faster pace than ever. However, what most organizations fail to recognize is that internal processes must adapt to these changes. Sometimes it is for compliance purposes or new legal requirements, but more often it should be because the business climate has shifted. As Darwin said, "It is not the strongest of the species that survives, nor the most intelligent, but rather the one most responsive to change."

If you use your business processes as a competitive differentiator, you will increase top-line revenue.

There are BPM systems, like Global 360's , that empower organizations to extract the maximum profit out of business processes - every time. Furthermore, they can provide end-to-end visibility across a complete process that spans multiple systems, departments, and people (e.g., loan origination, application processing, etc.), giving executives a true measure for performance and the ability to improve.

And that's the bottom-line.

Back to Business - Part II

I apologize for leaving you hanging on the last post. Picking up from where I left off, if you look at what all of their challenges have in common it is: poorly designed processes. Unlike many organizations, they actually know what their processes are, or at least what they are supposed to be. However, when there are no controls, the real world reality varies quite differently from the process design.

Take for example the new application process. While they are leveraging their Website to collect application information, most applications are still completed on paper - faxed or mailed in. Even if 100% were completed on-line, there is still the matter of how to process the application.

Unlike the auto insurance application and approval process, which is relatively straightforward, most insurance application processes involve many steps, systems, and personnel to reach a decision. After all, it is all about understanding and evaluating the risk - finding the best balance for the firm.

For this company, beyond the online form, their adjudication process is completely manual and involves a great deal of paper. They are far from unique. In most insurance companies and financial institutions, there is still a great deal of paper and manual processing.

At this point you may be asking what "manual processing" means. Imagine manila folders, filled with accumulated documentation related to an applicant which can include everything from a credit report, credit score, and photo copy of official identification to [particularly in the case of life insurance] lab reports, medical records, phone interviews, tax records... you name it, it's probably in there. Now picture that folder and stack of 10-20 just like it, landing on an Underwriter's desk, waiting to be reviewed. That underwriter may be collaborating with his/her colleagues during the review, adding notes, and other materials. It may be placed back in the filing cabinet, awaiting additional information. It may be routed to a specialist for a specialized review. It may sit while the Underwriter is on vacation. It may have to go to management for final approval. At the end of all of this, a decision is made and the applicant is accepted or denied.

From the applicant's perspective, there is often little feedback. As they wonder what is happening to their application...why it is taking so long...does it mean they are going to be rejected...should they get the ball rolling and apply somewhere else, etc. Many times they will call customer service to allay their concerns, but too often these folks are well intentioned, but grossly uninformed, saying merely, "The application is being processed." This is because they have little to no visibility into where the application is sitting and its status. It is a folder on a worker's desk, waiting for something to happen. This is not to mention, misplaced folders, lost documents, accidents, poor audit trails, etc.

This is a mere overview of but a single process. Multiply this by numerous processes and you can imagine why it takes many insurance companies, and this one in particular, so long to turn around work. It should also be no surprise that when you ask someone at an organization that is manually processing work how long it takes for something to be processed, they will have little confidence in the number they give. Although ironically, they will always be able to tell what their goal is.

Manual processes like the one outlined above and even those that may be automated fail to consider the priority of work. Take for example two applications, one an average application with an average $ value, the other a more more complex application and much higher $ value. Many manual and automated workflows are not sophisticated enough to differentiate the two. They are treated equally, but they are not. With a finite number of resources and a mound of paperwork, it is not unthinkable that the easy applications will be processed first. After all from a performance standpoint it can show how hard someone is working. The problem is the other more complex, yet greater $ applications, lag, ultimately frustrating the applicant and perhaps providing incentive for him/her to take the business elsewhere. Prioritization and allocation of work according to corporate goals is another key component for consideration in processing work.

In my final post on the subject, I will discuss how they can solve this systemic process problem and how they will benefit by doing so.

Back to Business

Happy New Year. Over the past few months, I was involved in an interesting sales cycle, working to help a mid-size insurance company with a few seemingly simple problems. It started with a discussion at a trade-show. This is the first of a few posts profiling their situation:

The Problem
This private company, like most, wants to grow. They have been around for over half a century, clearly understand their market and know where they can excel. However, over the years competition crept in. They are still the market leader in their primary lines of insurance, but growth has stagnated, margins are bare bones, and market share is decreasing.

They believe there are a few primary factors contributing to this:

1. High prices - the competition is undercutting their prices and while they have not engendered the same level of trust, saving money is a compelling driver to chose the lesser known provider
2. Slow turn-around on quotes - they rely on an independent broker model to identify new applicants, yet only 10-20% provide a bulk of the business. When a broker requests a quote, while the company does not know the actual turn-around time because there is no reliable way to measure, they estimate it takes 5 days. This leaves too much room for the competition to swoop in, provide a reasonable quote, and take the business. Usually the first one to provide a quote wins the business.
3. Slow turn-around on policy issuance - the application review process takes too long. Similar to slow quote turn-around, they have no reliable metrics, but estimate it can take 2+ weeks to issue a policy. Again, that leaves too much time for the competition to
   take the business.
4. Lack of "lead generation" through Underwriters - since they are spending so much time chasing documents for new applications, they are not taking time to drive leads from the independent brokers. Therefore driving more business from the same 10-20% of brokers, or increasing this percentage, is very difficult.
5. Delayed release of new products - the amount of retooling time required to just change a form delays the release of new insurance products.
6. High attrition in Underwriting - the inefficiencies lead to increased overtime, which frustrates and burns-out employees. Since they are known for good training, they ramp up an employee quickly only to see them leave for the competition. Compounding this damage, these employees talk to their old colleagues, who then leave to join the same company. Now they have lost multiple employees after having spent $thousands on training. They are unable to issue more policies faster as their current processes require additional human resources, which undoubtedly frustrates the independent brokers, who logically seek another provider to satisfy their client. All while further bolstering their competition. This is clearly a downward spiral.

These problems are certainly not unique. Next I will explore their primary challenge.

A Gift For The Executive Who Has Everything

So let's say you've been searching Amazon, ebay, Google, etc. for that special holiday gift for your boss. My guess is, you have not found anything. Certainly nothing unique. Who needs another desk clock, engraved letter opener, set of golf balls, or inspirational poster?

To find the perfect gift, it is most important to consider what the recipient wants. Then, you must determine if it is reasonable to spend the amount of money required to give this gift. While I could continue on dispensing such platitudes, you already know all this.

This year, take a different approach. What has "the boss" been asking for all year? It is probably not a "World's Best Boss" mug. If I had to take a guess it would be to help:

• Cut costs / save money
• Sell more / generate revenue
• Increase satisfaction/loyalty
• Ensure compliance with rules and regulations
• Improve efficiency
• Become more competitive
• Reduce inventories
• Eliminate errors/defects

So this year, instead of a tin of stale cookies, develop an idea and formulate a plan that will help your boss accomplish one or many of these objectives. To help save money, since it is likely that your plan will require technology for implementation and consistent execution, inventory the hardware and software your company already licenses to see what you can use.

Finding novel ways of using existing technology to solve business challenges is a great gift idea for both the receiver and the giver. That, and purchasing new process intelligence and optimization technology from Global 360. Either way, you won't have to battle anyone for parking.

Justifying IT Investments

IT spending is reportedly increasing, albeit modestly (6-7%, 2006; 2%, 2007). It is clear, however, in both research reports and my own conversations with customers, that enterprises are not releasing funds to CIOs and IT Executives without justification and metrics. A recent InformationWeek article explores this increasing trend.

While ROI has long been an important factor in justifying IT investments, the notion of measuring the effectiveness of these investments is a welcome extension. I have always been critical of and frustrated by both vendors and IT departments that do not track technology's contribution to the business. Reasons for a lack of measurement range from the difficulty of the task, to plain old politics. In the end, time and time again, the most effective providers and implementers of technology are those who track its value back to the mission of the organization. Furthermore, the IT employees who always appear to be on the fast-track to promotion are the ones who can provide evidence of the bottom-line results their efforts bring to the organization.

This list of a dozen metrics for measuring IT's effectiveness is an excellent start. The key for any manager, however, is to select those metrics that are best suited to their projects and organization...and stick to them. The ease with which overcrowded "executive dashboards" can be developed can lead to analysis paralysis. This is debilitating, allowing managers to avoid making critical decisions by hiding behind data, and preventing important projects from ever getting off the ground. A healthy balance and consistency yields the best results. Obviously neither the ability nor desire to measure effectiveness guarantees a successful implementation of a particular technology. However, through regular measurement and analysis, an organization can make data-driven tweaks and improvements, learn from mistakes, and foster a culture where IT is credited as a profit-center.

Doing More With Less

CIO Insight released its latest Business Process Improvement (BPI) Survey since 2003. According to the survey, BPI ranks as the "top business priority for IT organizations." This is an increase from their April CIO role survey, where it was the #2 priority.

Since I have been engaged for years in the Business Process Management (BPM) market and directly seen interest rise, I am not surprised by such a high priority designation. What is noteworthy is that for $1b+ organizations, one of the most significant drivers for process improvement is "ensuring compliance with regulations." This is only 2 percentage points behind the #1 driver, "improving productiviey." For smaller organizations, compliance ranks low on the list.

I suspect for larger companies, high-profile legislation and increasingly complex industry rules and regulations, coupled with large distributed workforces, the constant threat of litigation, and personal accountability (courtesy of Senators Sarbanes and Oxley) makes ensuring compliance a top priority. According to the survey, the holy grail is an approach that improves productivity and ensures compliance, all while reducing cost (priorities 1, 2, and 3 respectively). It harkens back to the old addage of "do more with less" with the addendum "...but make sure it's legal."

Hasn't this always been the case? Is any legitimate corporation interested in inefficient processes that waste money and break the law (set aside the Enron's of the world for a moment). It is encouraging to see that IT organizations, long criticized for being a cost-center, are increasingly focusing on technology to help directly improve business processes. In fact, I often encourage customers to use their BPM systems to demonstrate the explicit value of their contribution to their organization.

The Summer Of Consolidation

If you are a frequent reader of this blog, you have likely noticed that I tend to avoid news-related topics. My focus is on questions and issues that arise as I work with my customers to help them streamline their businesses to achieve maximum profitability from their business processes. But I would be remiss if I did not assess the two recent major consolidations in the Enterprise Content Management (ECM) space.

Here are my thoughts.

Open Text Buying Humminbird for $489M
While the shareholders still must vote, Hummingbird has accepted Open Text's takeover bid. This after Symphony Technology Group offered $465M, a bid many financial analysts felt was too low. I am not very familiar with these two organizations, although I have experience with RedDot, but I know that they have been staunch competitors. I suspect the motivation here is to remove a formidable competitor from the market. For Humminbird customers, hopefully they will not be forced to switch platforms and they will continue to be supported. Open Text would be wise to do so. While Open Text offers WCM, it is targeted at a different market and is not nearly as easy to use and feature rich as Red Dot. I would imagine that Red Dot will remain untouched.

IBM Purchases FileNet for $1.6B
Forrester is quite bullish on the acquisition, while Gartner has a more skeptical take. Funny how the two highest-regarded technology analyst firms can disagree like that. For years, everyone from customers and employees, to Wall Street have been speculating on who would buy FileNet. With a long history, large customer base, and a large amount of cash, they were ripe for the picking. Oracle, HP and IBM were always the contenders and it is not surprising that IBM was the winner. Given that most of the senior management, including Lee Roberts (CEO), spent years at IBM, it is a natural fit. I believe it is the closest cultural fit as well... an important consideration for any successful acquisition.

There is a great deal of conflict, however, as to the true motivations of IBM for the purchase, and the impact on Filenet customers. Ultimately only time will tell. Whether for the customer base, technology, or to eliminate a strong IBM competitor, acquisitions are not easy, and IBM has a shaky history (think Rational, Informix, Crossworlds, etc.). While WebSphere makes up a significant portion of the market, the majority is not standardized on WebSphere. It is unlikely that IBM will continue to support non-IBM platforms that FileNet offers. Furthermore, FileNet relies on a strong partner organization for sales and implementation...where does this leave them? IBM Global Services is no friend to a FileNet partner. For FileNet customers, I doubt they will see major changes within 12-18 months. I believe that the acquisition does open a great deal of opportunity, albeit uncertain, for FileNet employees and upward mobility that they never had.

The Bits and Bytes to Record Destruction

On the surface, it would seem disposing of electronic records should be easier than those on paper. While hitting the “delete” key may be straightforward, unfortunately for those seeking to permanently destroy a record, it is not that simple. This challenge is compounded where optical platters are involved. The permanancy of optical is also what makes destruction so difficult. While re-writeable platters exist, most legacy systems employ permanent write-once platters. Further, for legal purposes it is common for write-once platters to be the storage medium of choice . But when the document retention policy calls for destruction of a record stored on optical, the "delete" key is useless. The issue is compounded when the dates of the documents to be destroyed are significantly different, while residing on the same platter.

This is a common challenge expressed by CIOs and CFOs. Unfortunately there are no easy solutions to this, but there are options. It is possible to delete the pointers to these records that make retrieval possible. However this does not destroy the record. Another option is to "pool" records into "storage pools." These group documents based on pre-determined criteria, such as those outlined by the retention policy. Unfortunately, most legacy deployments do not have this capability. The best option for many is to first migrate those documents that are not to be destroyed, onto magnetic storage. This is especially helpful as vendors like HP are sunsetting support for optical jukeboxes. Once the records designated for continued retention are copied to magnetic, the appropriate optical platters may be physically destroyed. This guarantees that the record is permanently eliminated.

Remember that regardless of your corporate policy, consistency and compliance with the law are imperative.

The Trouble With Those Old Documents

Few realize how seemingly innocuous documents can get an organization into trouble. Recent history is littered with companies that fell victim to their own best intentions. Boeing Corporation back in 1997, spent millions restoring 14,000 e-mail back-up tapes related to different e-mail systems, for a class action lawsuit. The project was so complex that they chose to just settle for over $90m. More recently, Arthur Andersen in the Enron fiasco told employees to destroy records in accordance with the retention policy, but failed to provide important guidelines and did not invoke the policy consistently. As a result, they were convicted of obstruction of justice.

It is now years later since these high-profile examples, yet when I speak with my customers, I still find that document retention perplexes even the most diligent organizations. I suppose I should not be too critical since federal and state laws are often ambiguous, written retention policies are not easily understood, training can be costly, and enforcement is very difficult. However, this is an important issue across all levels. While there are a myriad of consultancies primed to help even the most challenged company, most solutions involve:

• A clearly written policy (that obeys all applicable laws), regularly updated, consistently employed, signed and committed to by those responsible for enforcement and execution (usually all employees). This must include clear retention periods along with the mechanics of retention. It is also critical to outline the circumstances when the policy should be suspended (e.g., pending lawsuit).
• A clear understanding for how all records (paper and electronic) are to be destroyed and who/what is responsible for its execution
• Cataloging and identifying records for easy retrieval
• Enterprise Software to implement, automate, enforce, and track compliance with the policy

Ironically, destruction can be the most important component to document retention. The courts have recognized that organizations cannot and should not keep everything forever, but they are sensitive to selective enforcement, especially in sensitive situations where there is the appearance of obstruction of justice. Furthermore, with a pending lawsuit, all available documents are subject to subpoena, regardless of whether they should have been destroyed. Destruction of electronic records, however, can be particularly challenging. Next, I'll explore approaches to destruction of these electronic records.