For Appian World 2012, we will be featuring a BPM Beginner, Appian Developer, and Business track featuring.  Each track will feature a variety of customer case studies, 3rd party analyst / BPM expert perspectives, and learning sessions to ensure success in your BPM endeavors.

In addition, we have added a 4th training day for those attendees wishing to get even more training on aspects of the Appian product.

For a full break-down of the agenda, please visit our Appian World 2012 agenda page.

We look forward to seeing many familiar and new faces this year.  Be sure to register early, registration is free but seating is limited.

Malcolm Ross

Director Product Management

The problem is, most BPM software vendors (and frankly, many industry pundits) have a limited view of what Social BPM really is. They relegate it to collaborative process design – making it easier for a handful of pre-designated people to work together in developing a process diagram. This is, at best, a single. The grand-slam homerun happens when Social BPM is applied to real-time collaborations across all employees (and customers) while business processes are being executed.

Let’s say you work in customer support for a large insurance firm. A customer has logged a trouble ticket for a rather mundane issue, and you have received a task with an appropriately moderate priority level. Let’s also say that, unbeknownst to you, a sales rep is sitting in a meeting with that customer discussing a large up-sell opportunity. While the support issue is nothing major, it is sticking in the customer’s craw and jeopardizing the deal. Through a Social BPM activity stream, the rep can do a search for the customer name, pull up all info related to that customer (including the trouble ticket event) and instantly post a comment about the sudden and unexpected urgency to resolve it. You instantly see the comment, take care of the mundane issue, and before the rep leaves the meeting, the problem is fixed.

If you’re using Appian, all of that took place via a single unified interface that’s as easy to use as Facebook. Unlike Facebook, however, Appian unites complex back-end enterprise systems, such as those used across your support and sales departments, and allows you to read data from and take action on those various systems from that single interface.

Social BPM isn’t limited to internal system and human events, either. Here’s another example:

You work for a property management company in Chicago. You have set up your Appian Social BPM feed to automatically track and post Twitter tweets containing the word “relocation.” A post appears in your Appian interface that says, “About to announce HQ relocation to Chicago. Start the apartment hunting!” You check the poster’s profile and see that she works for ACME, Inc.

ACME hasn’t issued their corporate press release on the HQ move yet, so your sales team has an opportunity to scoop competitors. Still in the Appian interface, you launch a case called “Jump on this Chicago relocation opportunity,” and add the comment “We have lots of Chicago apartments. Find ACME’s HR contact and offer some incentives.” This case goes immediately into process, gets assigned to your Chicago rep, and you’re off to the races.

These are just two examples. Once you get your head around the real potential for run-time Social BPM, the possibilities are virtually unlimited.

Ben Farrell, Director, Corporate Communications

The report outlines a four-step approach of “normalizing, standardizing and rationalizing applications; rationalizing and consolidating data centers; rationalizing data and security; and then migrating appropriate components to the cloud.” The DBB urged the department to act decisively in these areas, warning that the consequences could otherwise be disastrous.

According to the report, support for cloud computing is already strong, and validated, across the DoD: “Interviews indicate wide support across DoD for [data center consolidation and cloud]. Cost savings and efficiency benefits are widely understood; budget imperatives create [an] environment for making major changes; early DoD initiatives [are] already showing positive results.”

But tentative steps will not be sufficient, with the DBB stating, “independent and uncoordinated actions will increase barriers to coordination and information sharing. Costs will skyrocket and service levels will decrease given need to maintain legacy systems; future rationalization will be harder and more expensive. Security will fall further behind, leaving entire IT network increasingly vulnerable.”

Appian is committed to helping government agencies embrace the cloud. Medhat Galal, Appian’s VP of Enablement, is featured in the January issue of Government Executive answering the five most nagging questions about how the cloud can improve efficiency while reducing expenses.

Read the article, then contact us to learn how we can help your agency tap the power of Cloud BPM.

-Ben Farrell, Director, Corporate Communications

But a closer inspection of Guidewire, made possible through their IPO regulatory filings, shows their solutions are novel only in comparison to the ancient IT systems and paper-based processes used extensively by P&C insurers today.  Guidewire is a big advance over those, but only a few steps in the BPM direction.

First, let me share my congratulations to the Guidewire team.  They created software that’s leaps and bounds ahead of what is in use at most insurers.  They have 103 of the more than 7,000 P&C insurers around the globe using their products and solving real problems.  Well done!

Guidewire’s products address some of the most significant pains insurers have today.  Here’s an example.  Inadequate data capture and ineffective process controls in legacy systems lead to real costs such as “claims leakage.”  Claims leakage is where the amount paid on a claim exceeds the amount to which a claimant is entitled.  It is a prevalent problem, accounting for 4-6% of claim payments.  That’s $50 billion lost annually across the industry.  Claims leakage is entirely preventable.  If fixed, it would improve insurance carriers’ operating incomes by the same 4-6% as claim amounts paid improperly would otherwise drop to the bottom line.

Going after big expense gaps like claims leakage is very enticing, but only if a solution can be put in place quickly, cost effectively, and without disrupting operations.  Here’s where the bloom starts to come off Guidewire’s rose, as evidenced by facts and statements within their IPO filing.

Guidewire promotes that they have an “innovative modern software platform” that allows business rules, workflows, and user interfaces to be configured “without modification of the underlying code base, allowing customers to easily make changes in response to specific, evolving business needs.”

If I were a leader at an insurance company, that message would strike home and I’d be ready to sign up.  I’d want easily configurable software operating in all core functions across my enterprise as quickly as possible.  But the reality behind that vision is not so pretty.

Here are some important things prospective Guidewire clients should know that come straight out of their IPO document:

• “We sometimes commit to include specific functions in our base product offering at the request of a customer or group(s) of customers…. providing this additional functionality may be time consuming.” Sounds like you’re still beholden to a software vendor’s roadmap to get functionality you want.  Not everything can be configured by you to fit your business.
•  “Implementation and testing of our products by our customers lasts 6 to 24 months… depending upon the nature and complexity of our customers’ systems the implementation and testing of our products may take significantly longer than 24 months.”  This is definitely not off-the-shelf software.  Any value realized will be delayed a long time… and cost lots as you pay for consultants to do the implementation.
• “We have designed our applications based on our in-depth understanding of the P&C insurance industry.”  Guidewire’s products reflect the vendor’s understanding of your business, not your own.  Whatever they develop, and whatever specialization you request that ends up back in their product, becomes available to all your competitors.  Commoditization is becoming rampant in insurance.  The only way to be consistently profitable is to have unique capabilities and processes that you run your entire business upon.  It’s hard to be unique when you’re working with software designed for all insurance companies and in use by your competitors.
• “[Our] licenses are priced based on the amount of direct written premiums that will be managed by our solutions.”  So the more you use them, the more you pay.  Combine that with long implementations and you’re looking at expensive solutions that lack natural economies of scale.

The pains in P&C insurance that Guidewire addresses are clear and acute.  Their solution is definitely an improvement, but follows the old model of enterprise software requiring large “rip and replace” transformations of systems which are highly risky.  The IPO document notes that most customers have only deployed Guidewire for claims which mean the rest of their systems are still siloed and full of legacy code.  It also means full transformations will take a long time.  It’s not uncommon to find insurers 3-4 years into a full transformation and only at the half-way mark.

What insurers need is a faster way to get the same benefits Guidewire promotes, but with less risk, less time delay, and much less cost.  They need a platform upon which they can create whatever applications they want, built entirely around their unique processes and preserving their competitive advantages.  That platform needs to be able to “wrap and extend” existing applications to avoid highly risky wholesale replacement.  It also needs to have a licensing model that provides economies of scale making subsequent development and deployment less expensive, not linearly additive.  It also needs to provide an environment where users can access all enterprise applications, whether written in the platform or not, and from any desktop or mobile platform.

Any insurers interested in the value Guidewire targets need to recognize their solutions are only a few steps down the path that business process management (BPM) has already traveled.  Appian is seeing great adoption in BPM for insurance because we offer the most modern BPM platform that allows for rapid, iterative development of applications, a complete social BPM environment to foster communication and action, and mobile BPM so that any process can also be a mobile process.

Before you embark on a transformation that could be years-long and leave your operations exposed, consider the old saying, “the only things you find in the middle of the road are yellow streaks and dead skunks.”  Take a close look at how adopting BPM for insurance could get you the same benefits in less time with fewer risks and a lower price tag, keeping you from being exposed in the middle of crossing the road.

To learn more, please download my whitepaper titled “BPM for Insurance:  Four Paths to Outdistancing Your Competition” and join us for a webinar on February 16^th titled “Fueling Insurance Provider Success with BPM” featuring Ellen Carney from Forrester Research.

Evan McDonnell

Vice President of Solutions

On a related note, I’ve been toying with the idea of authoring another book, this time on Enterprise Architecture. There are certainly EA books on the market, so I’m interested in whether all of you think there are some gaps in the books available. If I did embark on this project, my goal would be similar to my goal on my SOA Governance book: keep it easily consumable, yet practical, pragmatic, and valuable. That’s part of the reason that I chose the management fable style for SOA Governance, as a story is easier to read than a reference manual. If I can find a suitable story around EA, I may choose the same approach. Please send me your thoughts either by commenting on this post, or via email or LinkedIn message. Thanks for your input.

The story behind the numbers is testament to how enterprise mobility, social collaboration and cloud computing are reshaping the IT landscape. Appian’s Mobile BPM, Cloud BPM and Social BPM address the broken state of enterprise software today.

The mobile and social revolutions are driving the “consumerization” of IT. In their wake, traditional enterprise software is no longer solving business problems. Increasingly, it is the problem.

It requires too much time, and is much too costly, to modernize these systems to deliver the type of mobile experience customers are demanding. Even if you push through that arduous ordeal, these systems remain stove-piped across business functions. Plus, you now have new levels of platform/OS discrepancies and security issues to deal with. All of this contributes to the increasingly fractured nature of an organization. On the social side, customer expectations about how they interact with a company are changing. Employee needs for how they interact with each other are changing. The nature of work is increasingly collaborative, and that is what social technology supports uniquely well.

Given that something north of 80% of an IT department’s budget is allocated just for the care and feeding needed to keep the lights on, there is precious little room in the current system for the focus on innovation required by these evolving needs.

That’s why 2011 was such a great year for Appian. Business leaders and IT executives are increasingly turning to us as their engine for innovation. Our BPM platform meets the requirements of the mobile revolution. Through “design once – deploy everywhere” we instantly enable comprehensive mobility that overcomes platform fracturing. We feature highly secure mobile processing. We deliver rapid mobile enablement of applications. The Appian BPM Suite also addresses the social revolution by masking extreme power behind an intuitive activity stream interface.  We seamlessly merge structured actions with unstructured events, and deliver collaboration that is firmly rooted in business events and outcomes.

But there’s no rest for the weary. Come to Appian World 2012 in April to get a sneak peak at Appian 7, and see how we will continue to push the envelope on modern BPM software capabilities.

- Ben Farrell, Director, Corporate Communications

And at Amazon: http://www.amazon.com/JBoss-ESB-Beginners-Guide-DiMaggio/dp/1849516588/ 

A review of the book is here:  http://rickwagner.blogspot.com/2011/10/book-review-for-jboss-esb-beginners.html

Ken has an illustrious resume. Currently COO of The Percell Group, he is the USAF’s former Director of Engineering and AFSO21 at the Warner Robins Air Logistics Center, former Executive Director Warner Robins ALC, former Director, 402d Maintenance Wing at Warner Robins AFB and former Chief Information Officer at Air Force Material Command. He has decades of experience in both software development and maintenance, and a pedigree in continuous process improvement, having lead several organizations to CMMI 5 process maturity.

As a member of the Senior Executive Service, Ken has seen the good, the bad and the ugly of how IT and process support (or hinder) the goals of federal organizations. He will share the experiences that led him to become a BPM software True Believer – and he’ll deliver insights that will help you ask the right questions and take the right steps to make BPM work for your organization. In addition, Ken will lead a panel discussion on Federal Procurement Practices with several agency representatives.

Don’t miss this opportunity. The conference is free, but the content will be invaluable. Register today!

-Ben Farrell, Director, Corporate Communications

Here are some startling facts:

ERP software maintenance fees alone “represented one-third if enterprise IT software budgets in 2010, with license fees accounting for another 25%.” That’s right: just keeping the ERP lights on eats up more than half of the total IT budget.

Perhaps that would be acceptable if ERP software delivered what the business needs today, but Craig shows that it clearly does not. Of ERP and other monolithic packaged apps he states, “These systems have developed inflexible architectures and have become aligned with silos built around business functions that now present a serious barrier to many fast-moving companies.” In other words, the limited extensibility of those apps leaves them stuck in business silos that they then help perpetuate, while required business functions existing in the white space between packaged apps continues to be paper- and email-based, cumbersome and non-standardized.

What’s the Conclusion?

Craig states that, “Enterprises that deployed ERP six to nine years ago are now questioning the budget for upgrades – and they should.” Business has changed dramatically in that time – and the rate of change is increasing. The business “wants more value and is reluctant to invest just to maintain functionality that many already view as lacking.”

What’s the Alternative?

Craig says that what’s required is a “Process-first Perspective” based on “an outside-in focus that starts with the needs of the customer.” To paraphrase again: build your business processes based on what’s going to optimize the customer experience, not based on the limited capabilities of your packaged apps.

How Do You Get There?

Do you need to take a jackhammer to the cement (or concrete) for a massive “rip and replace”? Luckily, no (have you ever used a jackhammer? It’s hard and slow work.). Instead, you can get the new and flexible functionality you need, and breathe new life into those legacy systems, by overlaying your packaged apps with a flexible process layer. In Craig’s words, “In the future, companies will address process and application gaps not by customizing on-premises software, but by linking best-of-breed applications using accessible and adaptable processes built on top of Dynamic Case Management or BPM Suites.”

What’s the Next Step?

Modern BPM software, with native mobile and social capabilities, is creating a seismic shift in corporate IT. Contact Appian to learn more about removing the concrete shoes.

-Ben Farrell, Director, Corporate Communications

Some insurers, like GEICO, are doing great.  Geico has found innovative ways to use the same technology that’s otherwise pushing towards commoditization to its advantage.  Take for example what GEICO’s done with their mobile SNAP-Quote application where all a customer has to do to get insurance is take a picture of their driver’s license with their smart phone.

But for every GEICO who’s using technology to get ahead, there are fifty other insurance companies lagging behind.  This is ironic because the insurance industry spends 15% more on information technology than other industries.

The reasons behind this paradox become clear when you look beneath the surface.  Insurers have been technology pioneers because they had to be.  Products in insurance have always been similar so companies differentiate on process and service.  It takes good information systems to scale process and service advantages and make them stick.  Most insurers invested heavily in custom designed applications to systematize their processes.  This proved to be a good path, at first.  But the high cost of maintenance has turned those custom applications into money pits.  Worse yet, their lack of flexibility is stifling innovation, preventing insurance providers from rapidly adapting to market changes, and making them easy targets for competitors.

Most insurers know they are behind.  They have traditionally addressed this through large scale “rip and replace” initiatives.  But the high costs, long time horizons, and inevitable delays make such projects highly risky.  However, forward thinking insurers like Crawford, TIO, and Vermont Mutual are taking a new approach, using business process management software (BPM) to fix challenges and grow new capabilities without “rip and replace.”

These companies are applying BPM to enhance the customer experience, reduce costs, get smarter about pricing risks, and become the top choice for independent agents.  The ways they use BPM range from innovative and dramatic (such as mobile BPM and social BPM) to incremental and operations focused.  And even a series of small incremental improvements can make a big difference in a world where insurers not using BPM are effectively strangled by their existing applications, unable to move ahead.

When I step back and look at this situation, it reminds me of an old joke with the punch line, “I don’t need to outrun the bear…”  To hear the whole joke and to gain an understanding of the many ways insurers are using BPM to get ahead of their competitors, please read Appian’s newest white paper titled “BPM for Insurance:  Four Paths to Outdistancing Your Competition.”

Evan McDonnell

Vice President of Solutions