Business Process-centric Information Technology

Business Process-centric Information Technology: Aligning Business and Technology for High Performance

Point of View

Information technology (IT) is now established as a primary—if not the primary—enabler of the business processes that make up a company’s activity. As a result, mastery of IT has become a key foundation for achieving high performance. Accenture’s High Performance Business research confirms that IT-savvy companies are early adopters of technology and are market leaders.

As information technology takes a more central role in business, IT systems must become even more flexible and adaptable. Today’s competitive global business environment requires organizations to create new business processes rapidly to meet changing customer demands, with fluid business models to match. To achieve the necessary flexibility, business processes must become uncoupled from technology.

The old paradigm, in which an application enabled an entire business process, has to be reformulated: the focus will be on the business services or processes being delivered by IT, rather than the underlying technology delivering them. This fundamental shift means chief information officers (CIOs) will be required to create and manage process-oriented composite applications that are tailored to deliver unique and highly differentiated business capabilities and processes. Composite applications typically use customized, off-the-shelf applications for processes that provide some differentiation, and completely outsourced applications for processes that have been commoditized. This strategy frees CIOs to focus on the aspects of the business that differentiate it from its competitors, concentrating the IT organization’s efforts on activities that add value to the business and contribute to high performance.

Making process-centric IT possible Two concepts underlie the emergence of process-centric IT: service-oriented architecture (SOA), and business process management (BPM). A service-oriented architecture approach enables the division of business functions and applications into services based on standards.

These services may be combined in different ways to create applications that allow organizations to deliver capabilities that are highly differentiated from those of their competitors. Business process management is a broad term covering a number of emerging technologies that allow for the design, modeling and orchestration of business processes. From a business process management perspective, business processes are viewed as assets which can be formally managed to improve an organization’s operations and allow it to achieve market differentiation. Business process management can include business activity monitoring. Such monitoring results in a feedback loop that provides companies with the means to develop their strategy, implement their processes, measure the value of those processes, and then improve the processes on a continuous basis. By enabling business processes through services delivered by the IT organization, companies can run their business process management on top of a serviceoriented architecture. The combination creates a business with the flexibility to create new business processes rapidly to meet changing customer demands, and to streamline existing processes to gain operational efficiencies and reduce costs.

Challenges to the adoption of process-centric IT Although building a process-centric IT makes considerable business sense, there are a number of challenges that could slow its adoption: • The failure of IT and business standards to keep pace with the market—or, worse, the emergence of competing standards—reduces the benefits of interoperability and the value of certain tools. • The adoption of process-centric IT as a largely IT-led initiative, with a consequent failure to work in an equal partnership with the business side of the organization, may adversely affect the design and development of applications. • The need for a change in mindset and skills. The approach until recently has been to solve particular business problems by implementing specific applications, so many people view business processes as virtually synonymous with applications. Process-centric IT requires organizations to take a far broader view of processes, and for the whole organization to become process-centric. • Much of the technology required to implement process-centric IT is still evolving. While there is a base set of standards to work from, the tools, language capabilities, execution

platforms and general operability of process-centric IT remain something of a moving target. • Organizations need to adopt a holistic view of process-centric IT, in particular to tackle the complex issues surrounding the effective use of processes, especially differentiating processes. A number of stakeholders should be involved, since various organizational boundaries need to be crossed, both internal and external, and political, governance and funding issues need to be dealt with. Despite these challenges, this approach is fast gaining ground thanks to the widespread adoption of standards, together with general advances in the technologies and capabilities that make process-centric IT viable. Two areas where process-centric IT is being applied are found in the banking industry, where the technology helps clients set up new accounts, and in a utilities company that uses a composite application to procure street lights. In both cases, what may appear to be a simple function in practice requires the building of process-centric composite applications incorporating functionality from several sources.

Taking the five-year view In three to five years’ time, business process management and processcentric IT will become the standard way of approaching software design and software engineering. This approach will allow an organization to measure its processes and understand where its performance is being constrained—whether as a result of bottlenecks, performance issues, excessive demand, or any other cause—and adjust the underlying services which make up that process accordingly. By adopting the process-centric approach, the organization will be able to provide infrastructure dynamically to accommodate spikes in demand, or release infrastructure and redeploy it elsewhere. In this way, the enterprise becomes much more automated and agile from both process and IT perspectives.

The move to a process-centric organization may not necessarily be wholly achieved within a five-year timeframe but will, at the very least, be evident within particular business units or particular areas of activity.

The promise of high performance Process-centric IT is, first and foremost, a way for the IT organization to build applications that will deliver greater flexibility and agility to the business—enabling high performance. For IT professionals, process-centric IT will mean a fundamental change in the application architectures they use to construct solutions. Specifically, process-centric IT will mean the following: • IT professionals and business people alike will need to take a process view of the business rather than an application view. • They will need to expand the scope of the projects they undertake and take a broader view of the business landscape. • They will also need to take a hard look at their processes, and if they are non-differentiating, commodity processes, will have to seriously consider outsourcing them or acquiring them as packaged applications. • Processes that truly differentiate the company and are unique must receive special attention. Rather than enabling them via customized applications that cannot easily be changed, they should be enabled by using standard services that can be reassembled as needs dictate. There is no question that IT will become more and more processcentric to support the needs of business in competitive global markets. Process-centric IT will enable businesses to create new capabilities quickly and automate business processes more effectively, thus reducing costs and building customer loyalty. Accenture is helping organizations take their IT organizations and strategies to the next level, closely aligning business and technology and

enhancing IT’s contribution to the quest for high performance. Accenture is an acknowledged leader in service-oriented architecture, and has decades of experience in helping leading companies manage and transform their business processes to achieve competitive advantage.

A large utility in the Western United States implements a business process management center of excellence The CEO of a large utility in the western United States engaged Accenture to help implement a number of business imperatives. Accenture helped the company to align those imperatives with a new logical operating model by using methodologies, tools and software previously developed as part of the process engineering initiative. This effort has drawn on deep experience across 18 industry groups to populate the Accenture Business Process Repository with proven business processes. Accenture uses the repository to create industryspecific solutions that drive high performance for its clients. Accenture then aligned the new operating model with the organization’s key business processes, and based on those processes, implemented a service-oriented architecture together with a business process management center of excellence. This allowed Accenture to document the processes within the utility and consequently to generate a BPM-based composite application to deliver those processes most effectively. This solution combines services from SAP and other applications, and has already delivered a payback, measurable in dollars, from the second month that the system has been up and running.

For more information Accenture can help IT organizations plan and implement business process automation that contributes to high performance by transforming business processes and optimizing service delivery. For more information about Accenture’s Business Process Management capabilities, visit www.accenture.com/bpm.

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About Accenture Accenture is a global management consulting, technology services and outsourcing company. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. With more than 175,000 people in 49 countries, the company generated net revenues of US$19.70 billion for the fiscal year ended Aug. 31, 2007. Its home page is www.accenture.com.