Business processes are, in essence, the embodiment of a company's strategy and can help determine how successful a company is at executing on that strategy. When these processes are turned into business rules and encoded in software, companies can realize significant financial and human efficiencies. Economic factors, such as the need to lower prices, improve product quality, and increase customer satisfaction, are driving demand for business-process management.
Such management technologies have been around for a number of years in software such as enterprise resource planning, workflow management, and application integration tools. But those tools haven't provided the flexibility and rules automation that IT and business departments required.
Lately, a new class of offerings that focuses exclusively on automating and managing the business processes that are embedded in custom and packaged applications has been introduced. Vendors include HNC Software, Ilog, MindBox, Pegasystems, and many others that are trying to provide a way for customers to centralize process management across their IT systems. These software makers offer business-rules repositories that make centralized management possible.
Centralized management is in demand, says Jim Sinur, a VP and research area director at Gartner. A year ago, he was asked about once every 90 days how a company could transition from what he calls "stovepipe sets" of business rules for applications, such as CRM or supply-chain management, to a centralized system. Now, he gets this question about 10 times a week.
"Lots of companies have rules engines stored in individual stovepipes and don't realize they have a global problem," Sinur says. "About 15% to 20% of our clients have enough experience with rules to have this problem, and that percentage will be growing over time" as companies try to automate their business processes across the supply chain.
But existing technologies haven't entirely automated the change-management aspect of business processes. Making changes to these processes and the underlying application logic requires a lot of programming changes. Business-process management tools often require programmers and business managers to adopt a discipline that doesn't come naturally, says Bob Parker, a research fellow with AMR Research.
Harleysville Insurance, which until last month relied on a manual process for implementing business rules in its applications, deployed HNC Software's Blaze Advisor 4 to give business units more control over their processes. While the IT staff still must test changes to rules before embedding them in applications, they no longer have to program the changes. Business users can implement rule changes on the fly using an intuitive interface.
Even better, policy underwriters at the Harleysville, Pa., company are now freed from the manual rules-management process and are able to handle three times as many insurance policies as they handled before getting Blaze Advisor 4. Project manager Eugene Egry says he expects to continue simplifying business-rules management. "What's facilitating this is the software," he says.
HNC Software has separated rules from the underlying business logic, and in doing so has enabled more efficient management of business processes. Business users can continue to make changes even as the IT staff is testing and deploying other changes in the rules engine.
Ilog, whose business-rules engine is embedded in SAP and i2 Technologies applications, last month moved to simplify business-rules management with a centralized repository. Because rules engines typically have been embedded in individual apps, such as supply-chain management, IT managers have had to drill down into multiple applications any time a market force required a business-rules update.
For that reason, centralized rules management is welcome at companies such as Providence Washington Insurance Co., which started using Ilog's business-rules engine in 1999. Ed Leveille, CIO and VP of systems for the Providence, R.I., insurance carrier, which services 100,000 policy holders, expects centralized process management to slash the months-long updating routine to a few days. Providence is building a real-time quoting system for all its business lines, and centralized rules management will be crucial once the process is complete in October.
The Ilog implementation, Leveille says, "was exactly what I was looking for: an engine in which I could take 90% of the rules back to the business users."