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Reinventing Business Operations with

Smarter Process

David MacDonaldIBM – Director, Smarter Process

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Source: IBM Global CIO Study 2011

Process reinvention is a top priority

Based on interviews with over 3,000 CIOs

of CIOs with mandates to transform the business

are looking to drive

better processes

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McKinsey Annual Survey

McKinsey December 2011 Technology Survey of 927 IT and non-IT Executives, December 2011

https://www.mckinseyquarterly.com/High_Tech/Strategy_Analysis/A_rising_role_for_IT_McKinsey_Global_Survey_results_2900

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New forces are disrupting how companies do business

Mobile requires process reinvention

Forrester forecasts that companies will spend about $900 million on

mobile process reinvention services in 2013 and up to $2.7 billion in

2014

$3.6B spend by

2014

Cloud deployments force companies to

rethink their processes

Gartner ranks Business Process as a Service (BPaaS) as the fastest

growing cloud segment with 47% annual growth

47% growth in cloud

processes

Socially-enabled processes drive increased productivity

According to McKinsey, social technologies, when used within and across

enterprises, can raise productivity of high-skill knowledge workers by 20 to 25%

25% productivity

improvement

Big data drives insight into processes

McKinsey found government administration could save more than €100

billion in operational efficiency improvements alone by using big data

€100B government

savings

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Process efficiency alone is no longer sufficient to ensure success

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Customer-centric business operations drive top line growth

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IBM’s approach for reinventing business operations

- to enable greater customer-centricity

- in the age of mobile, social, cloud and big data

- while driving efficiency and optimization intoend-to-end processes

IBM’s approach for reinventing business operations

- to enable greater customer-centricity

- in the age of mobile, social, cloud and big data

- while driving efficiency and optimization intoend-to-end processes

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InstantAt Internet speed

47% of online bank account opening applicants don’t successfully complete the process and fund their accounts

InsightfulTargeted and relevant

47% say it frustrates them when companies don't use the information they have to make interactions and offers more relevant

InsightfulTargeted and relevant

47% say it frustrates them when companies don't use the information they have to make interactions and offers more relevant

SeamlessInterconnected & ubiquitous

In the US, mobile banking jumped to 32% of customers in 2012 up from 21% in 2011

SeamlessInterconnected & ubiquitous

In the US, mobile banking jumped to 32% of customers in 2012 up from 21% in 2011

What do you need from your processes in a customer-centric world?

Processes must be:

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Reinvention can happen in many areas of the businessTypical entry points for Smarter Process

Banking

� Loan Origination

� Fraud Management & Compliance

� Customer Care & Insight

Energy & Utilities

� Power Grid Management

� Energy Consumption Management

Insurance

� Claims Processing

� Policy & Benefits Management

� Customer Self Service

Travel & Transportation

� Online Ticketing & Reservations

� Travel & Hotel Pricing Management

Healthcare

� Claims Management

� Care Process Management

� Regulation & Compliance Management

Government

� Citizen Eligibility

� Safety & Security

� Countering Waste, Fraud & Abuse

Telecom

� Pricing and Bundling

� Product and Feature Management

Retail

� Retail Distribution Supply Chain Automation

� Customer Loyalty Programs

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The gap in business operations is widening

Time to open a new account in retail banking

5 minutes – best

76 minutes – worst

Availability of loan funds

2 days – best

37 days – worst

Time for conditional mortgage approval

15 minutes – best in class

4 hours - median

Source: Boston Consulting Group, The “New New Normal” in Retail Banking, 2012

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Banco Espirito Santo improves the banking customer experience

Challenges

� Achieve strategic goal to improve customer satisfaction; open a new bank account in less than 20 minutes

� Roll out new processes faster, so new products can be offered sooner

“If you seek to be customer centric, customer focused, it

requires you to be a very efficient provider, a very flexible

provider, on the back end in terms of your processes.”

~ Miguel Rio-Tinto, CIO, Banco Espirito Santo

Business users built and deployed over 850 processes

Benefits

� Instant: Business users built and deployed over 850 processes to production

� Seamless: Created 80,000 process instances with over 3,000 users per day over a 12 month period

� Insightful: Applied KPI metrics to improve SLAs across processes

Solution

� BPM solution to quickly deploy new products and services

� Business users directly manage the changes to the business process

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University Hospital of Antwerp expedites diagnosis of rare diseases

Challenge

� Needed the ability to treat rare diseases – those that affect fewer than 5 people in 10,000

� Many rare diseases are not encountered by most physicians making their diagnosis and treatment difficult

Solution

� Platform built with expertise from GBS allows for earlier, quicker and more accurate diagnosis by integrating medical expertise and data mining tools

� Using Business Rules and Predictive Analytics, diagnoses are generated more quickly and accurately through a predictive model based on known patient data

Improving the care and prognosis of patients with rare diseases using rules and analytics

"The improvement in the quick diagnosis and treatment of rare

diseases can mean the difference in the lives of patients.”

~Geert Smits

CIO, University Hospital of Antwerp

Benefits

� Instant: Improves the quick diagnosis and treatment of rare diseases

� Seamless: Solution can serve as a comprehensive, intelligent and dynamic knowledge base on rare diseases

� Insightful: A combination of rules and data mining tools provides both higher sensitivity and more specificity to the rare disease diagnosis

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UK Border Agency detects threats earlier

Challenges

� Threats to border security are growing while passenger traffic increases, driving need for early detection of risks

� Passenger risk assessment involves data and processes across Carriers, Port Authorities, Immigration, Police, Customs

“IBM has enabled us to identify threats earlier so that we can more effectively deploy resources at the border, and in

some cases prevent travel altogether.”

~ Director, Border Agency

Secure over 120 million passengers per year

Benefits

� IBM Global Business Services designed and deployed solution that enables data sharing and process automation between various agencies

� System handles over 120 million passenger cross-border movements per year

Solution

� Enables the agency to identify threats sooner so they can focus attention on high-risk situations

� A near-real-time risk assessment provides enhanced security and speeds up processing

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Customer-centricity requires a cross-functional approach

The new triumvirate: Operations, IT and Line of Business

and business unit leaders

and technology leadersand cross- functional

business leaders

President

SVP/GM of OperationsChief Transformation Officer

Chief Innovation OfficerChief Customer Officer

Chief Risk Officer

…

VP of Claims ProcessingVP of Retail Lending

VP of Commercial LoansVP of Outpatient Services

VP of Power Delivery Services

Chief Technology Officer

VP of Software Development

Enterprise ArchitectIT Architect

Successfully attracting and retaining customers requires companies to think and act cross functionally.

~ Adam Klaber, Managing

Partner Emerging Markets, IBM

GBS

At HCF we have found that delivering a superior customer experience requires tight partnership between operations, IT and the various lines of business.

~ Stephen Nugent, General

Manager of Operations,

Hospitals Contribution Fund

“

”

“

”

Strategic Leadership: Chief Executive OfficerChief Financial Officer

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Key IBM capabilities for Smarter Process

Enterprise Content

Management

Enterprise Content

ManagementBusiness

Intelligence

Business

IntelligencePredictive

Analytics

Predictive

AnalyticsMaster Data

Management

Master Data

Management

Service Oriented Architecture & IntegrationService Oriented Architecture & Integration

Industry Solutionsand Accelerators

Industry Solutionsand Accelerators

Industry and Functional Consulting Expertise

Industry and Functional Consulting Expertise

Managed Business Processes

Managed Business Processes

GovernmentBanking EnergyHealthcare TelecomInsurance Transport

Case

Management

Case

ManagementBusiness Process

Management

Business Process

ManagementOperational Decision

Management

Operational Decision

Management

Operational IntelligenceOperational Intelligence

Mobile Social Cloud Big Data

Retail

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Thank YouMerci

Grazie

Gracias

Obrigado

Danke

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