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

Gartner’s Daryl Plummer is a Managing Vice President, Chief of Research and Chief Gartner Fellow. He is Chief of Research for cloud computing and Chief of Research for emerging trends. He will open your eyes about the challenges and opportunities for putting mission-critical processes in the cloud.

Clay Richardson, Senior Analyst at Forrester, is a BPM thought leader. His recent research around the ROI of BPM suites – and how to maximize it – will inform his Day 2 keynote.

Sandy Kemsley is recognized as a leading independent BPM analyst, and her Column 2 blog is a must-read for the community. Sandy will deliver a keynote on the business and cultural changes that are enabled by social BPM technologies.

Neil Ward-Dutton, Research Director at MWD Advisors, is one of the UK’s BPM luminaries. He will discuss BPM for Case Management best practices. He will also lead a panel discussion on BPM Centers of Excellence, and their role in building a high-value program.

Don’t miss this opportunity! Register today.

-Ben Farrell, Director, Corporate Communications

Economic strength means business growth, which demands scalable business processes and invites innovation. That’s why Appian already has an impressive roster of customers in the region – customers that are expanding BPM projects into enterprise-wide BPM programs – and it’s why we expect continued growth in the area. Dedicated Appian sales and professional services staff in-country will help us capitalize on the opportunity, and will ensure the success of our customers in the region.

In Dr. Rosemann’s interview, he states that Australia’s BPM community of practice is “one of the largest communities of BPM professionals in the world.” He attributes this partly to the country’s government having a very sophisticated focus on process management approaches, with this focus trickling through to the commercial sector. But he also makes the point that Australia’s commercial organizations, facing the competitive pressures of global commercial markets, are increasingly focused on process innovation.

He also echoes a sentiment we are already seeing in our established ANZ customer base; namely, the maturation from single projects to strategic programs. He says, “When BPM became popular [5-10 years ago], it was a lot of one-off projects, often not initiated by senior executives…It started somewhere in unexpected corners of the organization. I believe we now have
consolidated our capabilities much better. We see a higher attention toward enterprise-wide BPM, and we see more mature, technical BPM implementations.”

Speaking of Appian’s ANZ customer base, it echoes our global roster with marquee clients across government and commercial sectors, including strong penetration in financial services and insurance. For example, if President Obama needs to file a claim with Territory Insurance Office (TIO) on that crocodile insurance policy he received on his trip to Australia (Heaven forbid, of course), TIO would process it through their Appian-based claims management system.

-Ben Farrell, Director, Corporate Communications

“Today one of our customers said they were told by IBM: “why spend your money with Lombardi, we’ll give you our BPMS for free.” I finally agree 100% with IBM on something: their BPMS is worth nothing. Getting a cheap BPMS is like buying a dancing elephant for a dollar: cool, but who can afford to feed it?”

That’s Phil Gilbert talking. Or rather, Phil Gilbert back when he was president and CTO of Lombardi. Today’s Phil Gilbert is head of BPM at IBM. Say it again, Phil: “Their BPMS is worth nothing.”

Here’s another echo from former-Phil Gilbert that shouldn’t be forgotten:

“The choice isn’t between pure-play vendors and stack vendors, the choice is between BPM or IBM…What is BPM? I think it’s pretty simple: put the business back in charge of its business assets. And what is IBM? Keep that control in IT.”

They say the only way to achieve real change is from the inside, and I have no doubt that is what Mr. Gilbert would like to do at IBM. I don’t doubt his intentions for a second. I’m also sure Captain Edward Smith intended to miss the iceberg.

The fact is that nearly two years after its acquisition of Lombardi, IBM has still failed to outline a clear path for its BPM customers. Yes, it made a marketing-oriented announcement about a roll-up of its disparate BPM portfolio into IBM BPM 7.5, but that is a unified offering in marketing-speak only.

As Forrester analyst Clay Richardson rightly pointed out, IBM slapped on a new coat of paint, but hasn’t done anything substantial to rev the engine. He wrote: “While this is not surprising — we predicted that it would take three to four years for IBM to completely integrate Lombardi and WPS into a single unified environment — we expected IBM to communicate a strategy or vision for merging the engines as part of this announcement.”

In the absence of even a strategy, let alone any significant action around BPM engine integration, IBM customers are forced to figure out their own path. Their choices are what was WebSphere BPM (itself not a single engine, but the product of several acquisitions and internal development), and the additional Lombardi engine. The former is what pre-acquisition Phil Gilbert said was “worth nothing.” The latter is what IBM described as merely a “departmental BPM” solution in their acquisition analyst call.

If I were an IBM BPM customer I would certainly be confused. And worried. And wishing for a different kind of Wayback Machine of my own.

-Ben Farrell, Director, Corporate Communications

The words this person used were powerful and telling.  But I got more from their body language which showed the excitement I had generated ended up bringing back painful memories.  I knew right then and there that they wouldn’t even bring this to their IT department leader and a chance for their company to gain a competitive advantage was lost.

I wonder what this person’s CEO would have thought if they had been a fly on the wall for this conversation.  How did we get here?

I recognized that I suddenly had a front row seat in the battle for “business and IT alignment.”  Achieving that alignment is a nearly perennial topic.  It’s been around long enough that it has its own acronym – “BITA.”  Every business has a mission and all groups within the company should be working to support it.  Working towards the same goal should foster natural BITA.  But it so often doesn’t happen as my story above illustrates.  The reasons why this happens are many, which I’ll save for a future post.  Right now I want to cut to the chase and outline what I see as the best solution.  It rests with one simple key.  Let’s abolish the phrase “information technology department.”  Every company should rename it the “business technology group.”  In short, “IT” should now be “BT.”

Radical?  Not really.  When IT is its own department with a special name, the group develops a life of its own.  IT begins to think about what’s best for itself, not necessarily what’s best for the business.  The rapid death of enthusiasm I witnessed after my presentation stems from that.  Business leaders have to have their technology staffs totally focused on the innovation they can drive and how fast they can make it happen.  Let’s marry them back up with their business counterparts and remind them of their purpose, highlighted with the new name.

Here’s just one example of what can happen when we empower business leaders to more directly control how they make technology work for them.  It’s a tweet from Connie Moore, a noted business process management (BPM) analyst at Forrester Research.

Connie relays how Appian’s BPM software allowed a business leader at Starbucks to bypass an IT bottleneck.  Not only does this attest to the power of Appian’s software, it shows how we can be a point of transformation.  Because of this experience there are now people at Starbucks who think differently and ask what’s possible with business technology (BT) instead of assuming that information technology (IT) challenges will prevent their innovations from happening.

Is this a threat to existing IT departments?  Actually, it’s just the opposite.  IT departments are threatened now.  Delays in delivering new systems and mounting frustrations from the rest of the business only raise the threat level.  Traditional coding continues to move off-shore.  But if we move to BT, information technology people get the chance to tie themselves closer to the business and get a seat at the table where they can craft strategy, drive innovation and agility, and help improve their company’s ability to compete.  With a “BT” perspective, IT leaders should gain the courage to pull the plug on troubled projects that aren’t likely to deliver results.  In an “IT” world, that’s a visible failure, but in a “BT” world, that’s a tough, but smart decision.

So no more “IT”, it’s time for “BT.”  That’s what I’m going to be telling every CEO I know.  This is a seemingly minor change, but one that can have huge impact.  The status quo is literally taking energy out of some of our most driven, creative, and committed employees.  Let’s clear this roadblock and watch what they can do for our businesses.  And just imagine what those driven and creative employees can do with Appian’s mobile BPM and social BPM capabilities.

Evan McDonnell

Vice President of Solutions

If you like consumer frustration stories, read on and you’ll be entertained.  If you are in the insurance business, you definitely want to read my tale of woe as I also lay out how to easily delight customers and earn superior profits.

Life insurance is a very competitive market, thanks to the internet.  I started my search for a new policy on an insurance website that gave me quotes from multiple brokers.  The quotes included the insurance company name, their financial rating, and the annual premium I’d need to pay for the policy.  Like many others, I am now skeptical of financial rating companies as they appear to be at the heart of the whole sub-prime lending debacle.  That means I put little weight on financial ratings to help me make a safer purchase.  With no information other than price left to help me choose, I picked the lowest cost option after weeding out truly low rated companies.

Competing on price only works if you’re the low cost provider, so it is generally not a good path to profits.  Look no further than Apple for proof.  They didn’t amass a cash hoard of $76B by competing on price.  Apple uses their products, stores, and Genius Bar service to differentiate the entire customer experience.  This makes price comparison secondary… and arguably impossible.  If only an insurance company would think this way.

Here’s why I hate my new insurance company, in a nutshell.

• The “3-4 week” process I was told to expect took more than twice as long
• Everything was done in hand on paper forms; there were no options for electronic entry
• I was asked to submit the same information by different people on more than one occasion
• On my many calls to check on status, I was always told, “we’re just about done!“

Given their performance to date, I’m certainly not going to recommend this company to anyone.  I’m also keeping EVERY piece of documentation to prove my coverage because, should my family ever need to claim the proceeds (heaven forbid), I predict an equal if not greater debacle.  The only thing that keeps me from switching is that I have no indication other insurance companies are any better.

There.  I feel better for getting that all out.  Now here’s a vision for how I could come out of this process absolutely delighted, happily paying a price premium, and eagerly recommending my new insurance company to everyone.

• My quote comes with a link to start an on-line application process
• I can upload required documents during the application process and verify they have been received
• If additional information is ever required, I’m contacted via the method I request (no more voice mail tag!)
• I can check on the status of my application at any time and see clearly what steps are left and if anything is required from me
• I’m shown a graph that compares the time it’s taking to complete my application to the average for people like me so I have an indication if something might be wrong
• What’s promised to take 3-4 weeks takes that, if not less

What I’m describing can’t just be window dressing.  It has to be an external view of a well-run internal process.  Not only would it delight me, allowing me to feel happy paying a price premium, it would lead to lower costs.  (For example, the company wouldn’t need to hire that extra person to call me for the same information the last person called me about.)  That’s two ways to increase profits in a price competitive business.

For anyone about to embark on a similar insurance quest, there’s some hope.  The new Information Week 500 list just came out.   This is a list of the 500 most innovative business information technology organizations.  There are 42 insurance companies on the list.  The CIOs of these businesses focus on using IT to improve the customer experience, not just back office operations.  In fact, in 30% of the companies on the list, the CIO has formal responsibility for innovation, a number that’s grown substantially in the past few years.

To CIOs, both those on and off the IW500 list, I want you to know that Appian’s ready to support your drive for innovation and improving the customer experience.  My “dream” insurance scenario above could be enabled quickly through Appian’s BPM software, including social collaboration and mobile process participation for even greater speed and customer delight.  Many insurance companies are already realizing this.  Our base of insurance clients is growing rapidly and we’re proud to count Crawford & Company, a member of the IW 500 list, as a client.

So, to insurance companies everywhere, I ask which one of you is ready to let Appian enhance your processes, give you a source of competitive advantage, and help you start piling up profits?  You’ll even delight me in the process.

Evan McDonnell

Vice President of Solutions

Which type are you?  Read on to find out.

This distinction was made starkly clear to me last week during a demonstration for a Fortune 500 potential client who operates in a highly competitive market.  Their historical competitive strengths were low prices and a broad selection of products, but others have caught up on those dimensions.  Their future profitability hinges on providing outstanding customer service.  The ability to adapt their software to meet customer needs and expectations is therefore critical to their success.

Their predicament made me think about the two approaches companies take with software and the implications it has on their success.  I’ve summarized both approaches below.

Companies who play not to lose with their software:

• Focus on solving task or functional problems rather than complete business processes
• Purchase the same off-the-shelf software that’s available to their competitors
• License that software in part because it has built-in “best practices” (available to everyone and therefore not a source of advantage)
• Allow printouts, e-mail, and spreadsheets to fill gaps in the software instead of forcing automation
• Pay to create custom software but then resist enhancements because of sunk costs
• Stick to “plain vanilla” implementations of large enterprise packages because customization costs are too high
• Change their processes to fit software limitations rather than change their software
• Wonder why their market share and profits don’t increase

Companies who use software to help them play to win:

• Build their operations to delight their customers, not just deliver product
• Set demanding performance standards and build their processes to deliver outstanding service
• Choose software that allows for rapid changes, enabled by those closest to customers
• Identify their own best practices and incorporate them into their software
• Fully automate their processes to maintain control and visibility
• Take the lead in incorporating developments like social media and mobile communications
• Use their software to build sustainable competitive advantages

In her most recent blog post, Forrester Research Vice President Connie Moore shared her peers’ thoughts about how relying on large enterprise applications is a sign of playing not to lose.  Here’s my favorite quote:

“[Enterprise applications] help organizations bring the best practices embedded in apps to companies to make them more efficient.  But these apps are also inflexible and hard to change, whereas business models change quickly.  These systems were built to absorb information to create systems of record, which is critically important. But we’re in a period right now where the change driven by consumer technology is so vast and so rapid that the focus on process transformation must be more acute. I don’t think these enterprise app systems can participate in that transformation because they were never built for that.”

Connie’s blog also highlights how the game changers of social, mobile, and cloud could accelerate the trend away from inflexible enterprise applications.  The bar to mobile enabling business processes has never been lower as customers and employees are purchasing smart devices for personal use in ever growing numbers.  Companies playing to win are jumping on this development and are already using business process management (BPM) software with social and mobile capabilities to improve the customer experience and increase staff productivity.  This is happening across Appian’s customer base and I have a front row seat to watch.  It’s all very exciting.  Here are some examples:

• An electric utility shunned off-the-shelf field management software, creating their own using BPM to fit the unique aspects of their business.  Their application shortens down time by initiating maintenance actions and replacement part ordering while their technicians are still on site in the field.  Technicians snap pictures, record voice memos, fill out forms, and immediately collaborate with team members using Tempo, the built-in social feed in our software.  Assets get back in production fast which ties directly to revenue generation.
• A wealth management company created their own specialized customer and asset on-boarding application using BPM.  It allows their field staff to capture required information at the moment of contract signing, reducing the usual startup time by immediately initiating required processes.  This in turn gets customer assets under management faster, allowing the company to earn more revenue since they are paid a percent of assets under management.
• A specialty food retailer is automating its manual store inspection process by using BPM.  Armed with iPads, their inspectors can collect data and initiate repairs while still on site.  This translates to a more positive customer experience increasing loyalty.

If you realize you’ve actually been “playing not to lose” with your software, it’s time to acquaint yourself with just how much can be done using a state-of-the-art business process management suite and tackle places where you’ve allowed your software (and its limitations) to dictate how you serve your customers instead of driving software flexibility to continually delight your customers and set the competitive bar ever higher.

Evan McDonnell

Vice President, Solutions

According to the report, BPM suites deliver a range of business benefits in addition to pure cost-cutting:

“Instead of deploying slow-to-change packaged applications or building difficult-to-change custom solutions, leading organizations embrace BPM methodologies — supported by BPM suites — that drive rapid process change, increased business engagement, and dramatic improvements in worker productivity [as well as] driving greater process orientation, improving the customer experience, and accelerating the integration of merged and acquired companies.”

Appian customer Nick Deacon, global head of Business Process Management at Nokia Siemens Networks, is quoted in the report citing BPM software as a new, faster and less-costly alternative to traditional application development:

“One of our business teams received a quote from a systems integrator (SI) for nine months of development at a cost of $1.2 million to extend a particular process within one of our packaged applications. Our BPM team also reviewed the requirements and was able to deliver the same functionality over a three-month period at one-quarter of the cost quoted by the SI. We believe that much of the savings came from the BPM suite’s model-driven approach, which allowed us to quickly engage business stakeholders.”

The report also outlines the common costs of implementing a BPM suite. The top two are software license costs and maintenance fees. Appian is cited for offering full-featured BPM in the cloud – eliminating both the up-front license investment and the ongoing maintenance. The three most common reasons for BPM suite project failure are also noted:

• Inability to establish the proper business context for BPM
• Shortage of BPM skills
• Lack of planning for business change management

Addressing these issues at the outset of a BPM initiative will greatly increase your chances of success, and will position you to heed the report’s advice to “go all in with BPM suites to gain the greatest benefits.”

-Ben Farrell, Director, Corporate Communications

What is Social BPM? It’s an activity-stream interface that allows workers to more effectively manage their business processes. You can use Social BPM to handle critical events, collaborate with subject matter experts, initiate processes and consume personalized information; all with pinpoint enterprise security and auditability in a zero-training interface.

Below is an example showing how an ERP system can automatically post critical time-sensitive information to Appian’s Social BPM interface.

So why does Social BPM work, besides the intuitive interface? The biggest reason is that, unlike consumer social collaboration tools like Facebook, Social BPM doesn’t rely on people to post the important information. Instead, Social BPM obtains most of its critical data by integrating with running processes already being managed by your BPM software platform. To quote our CEO Matt Calkins: “Social may be the delivery mechanism, but the payload is business”. So, when key process-managed events occur (or don’t) such as a new customer on-boarding, an executive approval, or a delayed invoice payment, for examples, it is seamlessly fed into your Social BPM interface and targeted with pinpoint relevancy to your workers. Workers don’t have to pull information; it is intelligently and automatically pushed to them instead.

Not surprisingly, some of the biggest adopters of Social BPM are new employees. After all, what better way to learn how the business functions than to see it in action? With Social BPM new hires learn how decisions are made, who the subject matter experts are, and critical information that was previously buried in transactional systems. Social BPM is an ode to self-learning: a new hire’s training begins within minutes of joining the organization.

Social BPM’s productivity gains are also aided by Mobile BPM. Appian’s Social BPM feeds are accessible in real-time from all the major mobile platforms (iOS, Android and BlackBerry). Workers can securely connect to their business processes and continue doing business in real-time while away from their desks.

At Appian, we’ve run our global software business on Social BPM for almost a year now. It’s been tremendously beneficial to our employees, and it’s use has grown at a pace that has surprised us. An Appian employee, working on any one of the six continents we do business on, is treated to a wealth of targeted information. He or she can learn from our project go-lives, new customers, upcoming platform functionality, and subject matter experts. Just last week, through Social BPM, I collaborated with our consultants in the United Kingdom, learnt that we added a new customer in Angola, and provided feedback on upcoming platform features. Most of these actions were initiated because a managed-process automatically pushed personalized information to my Social BPM interface.

Social BPM is becoming indispensable to our customers for improving worker productivity, the timeliness of critical information, self-learning and BPM adoption. If you’d like to learn more about Social BPM and Mobile BPM watch our recorded webinar “BPM Just Got Better: Mobile | Cloud | Social” here.

- Sid Nazareth, Director, Solutions Strategy

In Pimp My Ride, young car owners get their vehicles customized at no cost to them.  Each car is modified and tailored to the personalities and interests of the owners. One car owner who loved to bowl got a ball spinner installed in his trunk.  Another owner who loved to surf got a clothes dryer installed in the back of his Volkswagen Bus.

This show came to mind because it was clear that all the application enhancements were things that would better adapt their application to their specific business processes.  They were making Appian’s technology work for them, not adapting to live with inflexible packaged software as so many companies do (which was the subject of my recent blog post).

Some of the enhancements were significant and added valuable new capabilities or extended the application to make cross-functional collaboration at the company work better.  If this application was built using traditional custom software development methods, the work involved would be substantial and run into the hundreds of thousands of dollars.  Progress would also be slow because full specifications would need to be written out before any work could start.  But the work required in Appian is a fraction of that, and could be completed in a matter of weeks.  Our team would work collaboratively with the client from a list of requirements, not detailed specifications.

It was good that we had the meeting to review this client’s requests as we found some ways to give them even more capabilities.  For example, this client built their original application before we introduced Tempo.  They had relied on process approval by e-mail.  That was becoming frustrating for some users who had a large number of process instances to approve.  They wanted us to design a special capability for bulk e-mail approval, but we were able to suggest using Tempo instead.  With Tempo’s interface, tasks can be approved with a click or a finger swipe on a mobile device.  And by utilizing Tempo, their order-to-cash process became mobile with just a simple check of a box.  The sales team who had to take time out of their day to sit in front of their computers and work through e-mail approvals for customer deductions could now take care of them from their iPhone, Android, or Blackberry device while sitting in the waiting room of their next appointment.

So if you’re tired of inflexible software and want to catch up to the mobile and social capabilities happening all around us, talk to Appian and let us show you how you can Pimp Your Own App!

Evan McDonnell

Vice President, Solutions