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December 5, 2002

On the Same Page

At Allstate Insurance Co., business process management is a product of internal focus and teamwork

by Chris J. Jensen

The value of business process management (BPM) has intrigued business leaders for decades. Industrial-age managers sought paradigm shifts by looking for ways to improve business processes and take advantage of emerging technologies.

Henry Ford understood the flow of work needed to build automobiles and used that knowledge to get the most out of available technology. He didn't invent mass production or the assembly line as is popularly believed; rather, he analyzed the flow of work required to build an automobile, and what resulted was an assembly line that moves. Work was brought to the worker instead of the other way around.

Fast-forward to the present and the information age: The potential of BPM has been the subject of books as well as hype. But has BPM delivered on its promises?

Gartner Group defines BPM as services and tools that support explicit process management (such as process modeling, analysis, simulation, execution, and monitoring and administration), including human and application-level interaction. Consultants sing the praises of BPM as a way for companies to bring order to corporate chaos, increase speed to market, and quickly adapt to an ever-changing business environment. Software companies — including FileNet Corp., Peregrine Systems Inc., Hewlett-Packard, Optika, Staffware, and Ultimus Inc. — offer solutions they claim will help link technologies, business processes, and the people touched by them. These applications have been described as the next killer app, the answer to many of today's business problems. Their creators tout them as out-of-the-box business operating systems that can create linkages to external business partners and allow the business to take control of system changes.

The number of vendors is growing in relationship to the surging market demand. But if so many people say BPM can deliver on its promises, then why has progress been so slow?

Maybe intelligent enterprises could learn from Henry Ford's experience. He didn't burn through millions trying to create or implement the next killer app. He analyzed how automobile-building processes worked at the time and their relationship to existing technologies, information, and workers. His analysis led him to use existing technologies in new ways, and history has shown that he definitely got it right.

The lesson here is to understand the current way of doing things first, analyze how you can improve on it, and only then design a new process using technologies, information, and systems that can take the business to the next level. In contrast, simply looking to technology to solve your problem before you thoroughly understand the existing business process will fail.

In this article, I'll explore how a dynamic and dedicated team of professionals at Allstate Insurance Co. made BPM a reality at their company. I'll describe how their vision and approach were formed and how they're being applied at a grassroots level. As you'll see, the team's approach, while successful, was not without challenges or disappointments.

Opportunities Embraced

The Process Center of Expertise (Process COE) was formed at Allstate in early 1997; initially, the team comprised a small group of professionals with skill sets in process management, enterprise architecture, and a variety of consulting practices. Up to that time, the company had its share of quality initiatives and programs that were presented in a traditional top-down approach. In most cases, short-term gains and improvements were achieved but sustaining the momentum was a challenge. The Process COE team considered this challenge an opportunity in reaching its goal: It wanted to develop a process management vision that would be self-sustaining and stewarded from inside the company, not by outside consultants.

From the outset, the team attained executive sponsorship that allowed it to craft its approach carefully before putting it into practice. That capability was a key to its success, because it was able to develop its mission and vision and hone the necessary tools in order to make the most impact. The mission statement, "As a center of expertise for Allstate, we create value through enabling the effective management of business activities and processes," suggests a process maturity progression that ultimately leads to a process-centered organization. This vision has its roots in the software development Capability Maturity Model.

To realize this vision, the team developed a detailed approach including working models, templates, and process modeling methods. It defined a set of business practices that would be executed through a group of client services. These services are applied in an internal consulting practice and include client proposals, statements of work, and facilitated workshops for process analysis.

The Process COE's internal consulting practice is designed to compete against outside consulting services and add value that only internal ownership can provide. The practice concentrates on defining, assessing, and creating processes in business terms using subject matter experts (SMEs). The approach was designed to work one engagement at a time while always keeping an eye on enabling the enterprise process management vision.

This approach was unique for Allstate at the time. The services were executed by a small team in facilitated workshops; these workshops included all the SMEs involved in the process. The role of these experts is to analyze and assess the current state processes, and to define the preferred "future."

The team used this approach to help define complex business problems that required a process focus. These problems often involved processes spanning geographic regions; people doing similar work often had never communicated how the processes in their respective locations were managed. The workshops helped to put everyone on the same page and enabled a migration to a single, agreed-upon best practice.

Keeping it Real

One of the biggest challenges businesses face today is managing knowledge and intellectual capital that results from business design and redesign activities. To help address this challenge, the Process COE developed a stewardship role for the management of process information. Ultimately, the process steward is the contact for anyone interested in sharing best practices or leveraging the process for reuse.

Process stewardship at the enterprise level offers the advantage of optimizing processes for everyone who uses them. The stewards are constantly monitoring process measurements and getting feedback from the SMEs working with the process to help identify opportunities for improvement.

The challenge of this model is that the process steward has responsibility and authority over a process that could cut across traditional organizational structures and spans of control. Thus, the process stewardship focus requires a change in thinking about organizational accountabilities and how work gets done.