Focusing on the 'm' in BPM for financial services

Editorís Note: In this Q & A, ebizQís Peter Schooff speaks with BPM consultant and author Andrew Spanyi on BPM and financial services, with an emphasis on management. Spanyi, managing director of Spanyi International, a BPM consulting and training firm, has written three business books, speaks frequently at industry conferences and leads many workshops. This interview, excerpted from a significantly longer podcast, has been edited for clarity, length and editorial style.

ebizQ: Your work emphasizes the "mĒ [management] part of BPM. Iíve read that you describe that approach as the needed change and behavior for taking full advantage of process orientation. Could you elaborate on that a bit?

Spanyi:
I've been interested in the management part of BPM for some time. Frankly, while BPM tools have been useful in modeling and automating business processes, the fact is that for many companies the "m" is totally missing in BPM. That is, the functional and data silos are alive and well, they haven't been torn down, and the senior leadership team simply does not collaborate to achieve a shared view of the value creating business processes. Thatís what I meant.

ebizQ: Now, to turn the focus to financial services, how does all of thisóBPM specifically--apply to financial services?

Spanyi:
Well, BPM tools have been used to address issues like to improve the account-opening process or issuing credit cards or responding to customer inquiries. But these are individual instances. Itís pretty rare that we see any financial-services organization use the power of BPM on its full set of value--creating business processes such as new product service development, product service delivery, etc.

ebizQ: So then what would you say are some of the challenges that companies face if they do want to implement BPM in the financial industry?

Spanyi:
Well, I think the biggest challenge is failing to achieve a systemic view of the business in a process context. That's probably the biggest challenge. Financial services are still struggling since the financial collapse, or downturn, in 2008. The principal focus [now] is cost reduction and that's understandable.

But one would hope that, over time, a challenge of adopting a systemic view would come to pass and financial services firms would stop putting methods before the results and the structure before process. I see, so often, that BPM tools are deployed in a functional silo. They don't take advantage of the full potential of these integrated business process management suites that have so much potential to improve performance for financial services firms.

ebizQ: That makes a lot of sense. Now what would you say, in your experience, are some of the key mistakes that financial service firms should avoid?

Spanyi:
Well, there are quite a few. But let me just name a couple of the big ones.

One of the key capabilities of BPM tools is the ability to model business processes. I see company after company just going and modeling a whole bunch of small business processes. What's really not understood is that the modeling of business processes is simply a prerequisite for the dialogue among the senior leadership team as to how can they eliminate some of these non-value added handoffs, how can they automate certain aspects of their operations. Itís the dialogue where the goal lies. So modeling is not executed very well.

The other thing that I see, another mistake, is that companies put methods before results. So BPM is the method, or Six Sigma is the method, or Lean is the method, [but] what should be happening is we should be clear on the results that we want.

Over three decades ago, [economist and Harvard Business School professor Theodore] Levitt said: "No one wants to buy a quarter-inch drill; what they want is a quarter-inch hole.Ē That's still true today. No one wants BPM. People want the results that BPM can do for them--to reduce cycle time, improve customer service and reduce cost.

ebizQ: Looking forward, what do you see ahead for BPM in the financial services industry?

Spanyi:
Well, that's a bit hard to say. But first of all, I think a lot of financial services firms are struggling and they have been struggling for almost four years now. It'll be four years this fall. I'm hoping that the economic environment will continue to improve. If it does improve, I really see an opportunity for BPM to be deployed on an enterprise-wide basis.

So as I said earlier, it's not just for new account openings, or it's not just to improve the issuing of credit cards, but it's [an opportunity to] really to take a look at all the end-to-end processes in a financial services firm. If you're talking about a bank, it's going to be new product-servicing introduction, product and service delivery, and so forth. If you're talking about an insurance company, it's going to be new application processing, it's going to be claims processing and even processes such as the recruiting process for those insurance companies that deal through independent brokers and agents.

So what I see in the future, hopefully, is that more and more financial services firms will recognize that the principles and practices in process management cannot just be applied systematically, but will be applied systemically to create value for customers.

READER FEEDBACK: Are you in the financial services industry? If so, what are some ways that you have overcome challenges to implementing BPM? ebizQ editors would like to hear about your experience. Contact Site Editor Anne Stuart at editor@ebizq.net.



About the Author

Peter Schooff is a former contributing editor for ebizQ, where he also managed the ebizQ Forum for several years. Previously, Peter managed the database operations for a major cigar company, served as writer/editor of an early Internet entertainment site and developed a computer accounting system for several retail stores. Peter can be reached at pschooff@techtarget.com.

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