Process The way we see it

Global Business Process Management Report Contents

Foreword 3

About the study 4

Executive summary 6

The key to BPM success: BPM as a C-level concern 8

How may I help you? The key benefits of BPM 10

Cost efficiency 10 Business agility 12 Compliance 14 Customer-centricity 15 Social media strategy 19 Staff satisfaction 20

Show me the money: BPM and Return on Investment 21

Speculating to accumulate: BPM as a counter-cyclical investment 23

Barriers to BPM implementation 25

Key conclusions and recommendations 29

Capgemini sector and country focus 32

Financial services 33 Public sector 36 Manufacturing, automotive and life sciences 38 Consumer products and retail 40 Telecommunications, media and entertainment 42

United Kingdom 45 United States 46 Australia 47 Germany 48 Italy 49 France 50 Spain 51 Nordic Region 52 Netherlands 53

Acknowledgements 54

2 Foreword

Welcome to the Capgemini Global BPM become an integral and barriers to success. Management Business Process Management key part of this proposition. of change in such endeavours is a (BPM) Report. This report is an key part in enabling the appropriate exploration of key trends in BPM as Business Process Management is alignment of business and seen by CXOs across a broad selection becoming ever more relevant to both to support their transformation of sectors and geographies. BPM large and small in the efforts. I hope that you find this report is perhaps at a tipping point – it’s current economic climate. At a time of benefit in the further adoption of certainly at an exciting stage in its when many different market sectors are Business Process Management. evolution. As both an engineer and facing slow revenue growth, customer an Operational Research practitioner churn and increased pressures in my early career, and subsequently on , BPM becomes a critical as a consultant, I have seen BPM weapon in the battle for efficiency Bob Scott through its development over the and effectiveness in processes. Senior Vice President last 26 years. BPM has its roots in Furthermore, in a challenging and Global Head of BPM management practices such as Total changing business environment that is Capgemini , Business characterized by uncertainty, it allows Process Reengineering & Model Based organizations to adapt, be more agile Development; but the advent of the new and fleet of foot. Capgemini is seeing generation of sophisticated modelling strong demand for BPM services in and process execution markets such as the USA, the UK, the has greatly enhanced BPM’s power Netherlands and France; and there to truly transform . This are clear signs of increased interest in has created one of the most rapidly other geographies such as, Germany, growing and attractive market sectors Sweden, Spain, Italy and Australia. for both services and technology. We In sector terms, the financial services see BPM as a critical management industry has led the way in BPM discipline that when executed against adoption over the recent past, driven clear, cross organizational business by increased focus on customer- objectives, can deliver exceptional centricity and regulatory compliance. value to that . However, Other sectors, public sector, utilities, we also see that the potential for BPM telco, retail and manufacturing are now is not well understood. Our decision not only catching up, but are starting to conduct this global survey stemmed to use BPM in new ways to create new from discussions with our clients. We business models to serve customers sought to gain a better impression of and outsmart the competition. their understanding of BPM, how they measure its value, and how far it is The research findings also show prioritized within their Business and however that this is a complex Technology Transformation efforts. landscape, and we are not seeing adoption of BPM in a clear and This research confirms our belief consistent way. This report also looks that BPM needs to be a jointly owned at some of the barriers to adoption, Business and IT discipline. It also with organizational silos being a demonstrates that it is starting to gain major obstacle. Waters are further significant traction in the market muddied by fragmented budgets, lack and investments are starting to pay of clear governance and ownership dividends to the early adopters. At and internal politics. The objective Capgemini we are being asked by of our investment in this research our clients to help them simplify was to shed some light on and improve their business models these elements with a view to assisting and the technology that supports organizations to create strategies that them and we are already seeing avoid or at least mitigate some of these

3 About the study

Capgemini worked with FreshMinds, Only participants from firms with The second, qualitative phase of the a UK-based research firm, to conduct more than 1,000 employees were research comprised a series of in-depth the primary research for this study. eligible for the survey. 55% of survey qualitative interviews with senior The research process consisted of participants were drawn from business and IT professionals drawn two complementary phases. enterprise companies with 10,000+ from the networks of both Capgemini employees, 16% from large companies and FreshMinds Research. These During the initial quantitative phase with 5,001-10,000 employees and individuals were selected to represent of the research, a 30 minute online 29% from mid-size companies a cross-section of geographies and survey was completed by over 1,100 with 1,001-5,000 employees. sectors, and were selected for their CXOs, senior business managers, IT practical experience of Business directors and managers, and other Respondents were drawn quite Process Management initiatives. senior business decision-makers. evenly from 11 markets: In each section of the report, our All major industries were • Australia insights are based on the quantitative represented in the study: findings from the primary research, • Brazil illustrated by graphical representations • Distribution and transport of the data. These are supported and • France illustrated by anecdotal findings • Financial services and quotations from the qualitative • Germany interviews that comprised the • Public sector secondary phase of the research. In the • India sections labelled ‘Capgemini view’ we • Manufacturing, automotive have added supplementary analysis and life sciences • Netherlands that is drawn from our consultants’ experience of working on BPM . • Education and science • Italy

• Consumer products and retail • Spain

• Telecommunications, media • Nordic Region and entertainment • UK • Utilities, energy and chemicals • USA • Professional services

• Healthcare

4 5 Global Business Process Management Report Executive Summary

Capgemini’s Business Process Management research examines current practice in BPM, the benefits being achieved and the barriers to success. A key theme is the relationship between executive-level sponsorship of BPM and its success.

The purpose of our research is to survey respondents who have both say that their business processes are help organizations understand what knowledge and practical experience either “managed” or “optimized” − the is involved in realizing the benefits of the topic, 82% believe that BPM top two levels of process maturity of BPM, and avoid the pitfalls that should be treated as a C-level concern. as defined by our maturity model. many have already encountered. There is a correlation between process BPM has an increasingly high profile, maturity and treating BPM as a C-level with a growing belief among large topic. 68% of survey respondents organizations that BPM should who state that BPM is an important be sponsored at a senior level. Of agenda item at managerial level also

The Capability Maturity Model provides a framework for understanding where our clients fit in terms of their adoption of BPM, and the potential roadmap for further development. The model was first developed by the Institute of Carnegie Mellon University. 1

Repeatable Managed

The process The process is deliberately is at least managed in documented accordance with sufficiently agreed upon metrics Process The starting The process is defined / management point for use includes of a new or confirmed as a standard deliberate process undocumented optimization / repeat process business process improvement

Initial Defined Optimizing

1 http://www.sei.cmu.edu/cmmi/ 6 Figure 1. There is a clear correlation between prioritization of BPM adoption within a The research highlighted business and improved performance of processes. practical issues which must be

Which of the following best describes the level of process maturity within your organization? overcome in order to implement BPM successfully, notably:

Total Respondents who indicated “Currently Business Process • Functional silo culture Management is an important agenda item at managerial level” • Fragmented budget

• Perception of BPM as an IT matter

• Resistance to BPM from IT staff who have responsibility for existing

• A lack of readiness or willingness to tackle the change 6.8% 1.7% 15.9% 11.4% 27.3% 18.8% 23.6% 38.9% 15.8% 28.8% 10.7% 0.4% management issues associated with BPM implementations Initial Repeatable Defined Managed Optimizing Don’t know To overcome these barriers, strong Overall, just 16% of respondents customers reported a positive impact leadership (including C-level believe that their organization’s on the business. A similar proportion of involvement) plus a clear vision are processes are currently at the those whose objective was to improve needed. Another requirement for “optimized” level, but more than ever compliance and successful BPM implementation is that before, companies are recognizing observed a beneficial impact. Specific companies must be willing to break the opportunity that BPM presents benefits of BPM adoption which came with the past and embrace change. to improve process maturity. 45% of through strongly were improved staff participants in the survey anticipated satisfaction and greater efficiency. Positioning an organization for that their organization’s interest in BPM requires some effort, but the BPM would increase over the next 12 positive experiences of those who months. This finding confirms that participated in the research suggest BPM is increasingly becoming a part of that it is a step worth taking. mainstream management thinking.

There is compelling evidence that Figure 2. 45% of respondents anticipated that their organizations interest in BPM would BPM can deliver tangible business increase in the next 12 months. value. 96% of those who had tried How do you anticipate that the current level of interest in BPM within your organization will to measure ROI from their BPM change over the next year? investment reported a positive return, Don’t know with 55% measuring a return of at A lot more The same amount least twice their initial investment. emphasis of emphasis This may explain the finding that in challenging economic times, 13.8% A little more 19.9% investment in BPM becomes more, emphasis rather than less, attractive. 68% of respondents stated that a more difficult 28.0% business outlook than expected would lead to their organization placing increased emphasis on BPM. 3.0% 30.8% The benefits of BPM vary depending 4.6% A lot less emphasis on the organization’s objectives, as well as its level of maturity. More than A little less three-quarters of those respondents emphasis who had introduced a BPM initiative with a view to improving relations with

7 The key to BPM success: BPM as a C-level concern

The more Executives know about BPM, the more likely they are to believe that it should be regarded as a C-level concern. 82% of participants who have both knowledge and practical experience of the topic believe it should be part of high level business strategy.

This is in stark contrast to the 20% of BPM rather than being of respondents who say that BPM is hampered by the existing currently treated as an important technologies. Strong BPM agenda item at managerial level within leadership at a strategic and their organization. At present, a lack tactical level is essential for of senior sponsorship means that long-term BPM success. only a minority of companies are reaping the full benefits that Business It should be noted that while Process Management can bring. These strong BPM leadership is benefits are discussed in greater detail important, it is not sufficient. in the next section of the report. Programs often fail because of a lack of day-to-day governance. Capgemini view This can lead to an insufficient

framework to address competing To be successful, BPM needs to requests for limited resources, address organizational silos. In differing objectives and timescales. order to allow this to happen, executive sponsorship at enterprise level is essential. It is important for C-level decision-makers to focus on the business outcomes

Figure 3. Respondents who have the greatest knowledge of BPM are significantly more likely to believe it should be treated as a C-level concern.

Do you consider BPM to be a C-level concern?

“Percentage of respondents indicating ‘Yes’”

82.0%

60.6%

Respondents indicating “I know a lot Total Respondents about Business Process Management and have plenty of practical experience of it”

8 “Improving process is vital for Figure 4. Just 20% of respondents stated that BPM is currently an important agenda item at our business but can be a painful managerial level. process which meets resistance Which of the following best describes the current level of interest in Business Process in some quarters, hence the Management within your organization? need for C-level sponsorship.”

IT Manager, enterprise level Our We are investigating Currently Business utilities business, UK organization is the concept and Process Management not currently small projects have is an important agenda interested in been started item at managerial “Process improvements need the topic level and at least one strategic initiative in to be embedded throughout this field is under way the organization. The top 10.5% management’s time and 18.6% attention needs to be given to such a strategic and longer- 20.1% term value creating item.”

Business Unit Manager, Federal government agency, USA 16.6%

17.4%

We are interested in the subject 16.8% but there have One or more been no concrete departments are actions so far currently dealing with it at a more tactical level Don’t know

9 How may I help you? The key benefits of BPM

This research examines which business drivers are most critical in different sectors and explores the application of BPM in these aspects.

To understand the benefits of a BPM implementation for a -efficiency particular organization, it makes sense to consider first which Many organizations grasp that medium-term. Of those companies business drivers are most critical improving cost-efficiency requires surveyed that are currently planning for the organization. The business more than simply slashing budgets. to launch a process management challenges that respondents identified Strategic investment is required in initiative, the area in which the highest as most important reflect the order to achieve material savings. proportion believed the project could macroeconomic outlook prevailing 56% of respondents anticipated that have greatest positive impact was in many developed markets and their organization would increase in maximizing cost-efficiency. the pace of technological change. investment in efficiency over the next 12 months. Far-sighted companies are recognizing that effective implementation of Business Process Management technology and techniques can be a route to achieving significant efficiency savings in the

Figure 5. 56% of businesses will increase investment in maximizing cost-efficiency over the coming year.

How will your investment in the following business area change over the next 12 months: Maximizing cost-efficiency?

37.2% 30.1% 43.0%

32.8% 35.4% 30.7% 23.4% 29.2% 21.9%

Invest a lot more Invest a little more Invest the same

5.6% 5.0% 4.4% Total 1.1% 0.0% 0.0% US

UK

Invest a little less Invest much less 10 56% of respondents anticipated The application of BPM technology resources, or increase output with the that their organization would and thinking automates complex same resources. BPM can be an integral increase investment in efficiency processes, reduces manual work and part of an intelligent cost management over the next 12 months. eliminates duplication of effort. 74% strategy, which allows a business to of respondents who launched a BPM cut costs rather than cut growth. initiative with a view to reducing “With process improvement manual work reported a positive you’ll streamline and automate impact on the business. It is possible business processes, give to achieve the same output with fewer everyone in your company a complete view of the customer, provide deeper analysis and Figure 6. The three areas in which businesses anticipate BPM could have the greatest impact are: Maximizing cost-efficiency, optimizing time-to-market, facilitating insight into critical sales customer self-service. and customer metrics, keep everyone focused on getting In which of the following areas do you think process improvement new customers while keeping could have the greatest positive impact on your business? the ones you already have.” Facilitating customer Maximizing self-service cost-efficiency IT Consultant, enterprise level private healthcare business, UK

29.7%

Optimizing 55.8% time-to-market

38.8%

n.b. Respondents were able to select more than one answer, so percentages sum to more than 100%.

Figure 7. 74% of businesses that introduced BPM to reduce manual work and increase automation reported a positive impact.

What impact has this BPM initiative had on your business from the following perspective: Improving process performance by reducing manual work and increasing automation?

43.1%

31.0%

15.5%

6.9% 1.7% 1.7%

A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact nor a negative impact 11 Business Agility

In uncertain economic times, business agility is important. As technology cycles move ever more quickly, businesses are constantly striving to cut cycle times: two thirds of respondents (66%) identified optimizing time-to-market as an important business driver.

45% of survey participants anticipated Figure 8. 78% of businesses believe their BPM investment improved the flexibility of the that their organization would increase organization. investment in their ability to react What impact has this BPM initiative had on your business from the following perspective: to changing market conditions Improving the flexibility of the organization? over the new 12 months. Agile organizations realize higher margins on their goods and services by taking 39.5% advantage of market opportunities: 38.6% two thirds of respondents (66%) identified optimizing time-to-market as an important business driver.

BPM enhances the ability of businesses to react to changes in 12.5% the business environment. 78% of respondents who introduced 6.8% BPM with a view to increasing the 2.3% 0.0% flexibility of the organization reported A very negative Quite a negative Neither a Quite a positive A very positive Don’t know a positive impact on the business. impact impact positive impact impact impact nor a negative impact

12 “Taking the attitude that ‘it has Capgemini view Rules management always worked like this’ is no way to compete. We are a lean Any organization looking to Organizations manage their organization, constantly trying to achieve business agility must interactions with the external stay ahead of the competition.” embrace three key concepts that world through documented and we like to call “the agile agenda”: agreed policies and procedures: Customer Services Manager, medium- processes are just one example. sized manufacturing business, Sweden • Process management Business rules are explicit policies embedded within processes. • Rule management The ease with which these rules • Integration and automation can be adapted to comply with regulatory or market pressure can Process management often be a source of competitive advantage. Organizations that To be agile, organizations know the value of rules often use must also be in control of decision engines to find, update, their process assets. Processes deploy, and maintain rules must be documented and across processes in real time. understood. They must be visible and measured continuously – BPM is moving into an ideally in real time – to ensure unstructured, collaborative age. compliance with shifting market Rules management will be the and regulatory objectives. way to stay properly governed, visible, and compliant, while Business Process Management dynamically keeping processes on (BPM) solutions provide modeling track with changing and complex capabilities that make processes desired outcomes, goals and KPIs. explicit as models. These models are created by, or in collaboration It will become increasingly with, end users. More importantly, important to set rules properly they can be updated by users in order to manage BPM for without recourse to IT. increased agility. There will be a premium on managing Regardless of who makes changes, uncertainty, and on making better the agility comes from the fact that decisions about business rules. the changes are made to explicit Simulation and optimization models rather than changes to techniques can help, and so can lines and lines of arcane code. real-time analysis and response.

13 Compliance

Compliance is at the forefront of the minds of business decision-makers. Large organizations face great pressure to demonstrate their adherence to rules in an ongoing fashion.

More than 77% of respondents 70% of participants indicated that who introduced BPM with a view responding to changes to legislation implementation of BPM. Interest to improving compliance and risk is an important consideration for their in BPM is also growing rapidly management reported that the business. If companies do not have in traditionally heavily regulated initiative had a positive impact an agile, flexible for handling industries such as life sciences and on their business in this regard. compliance it can be a costly business. aerospace. Application of BPM can allow businesses a great advantage Within BPM systems, companies can in terms of accommodating new “In the past, there were stand- build compliance into their business legislation quickly and with alone systems followed in rules. Processes produce automated minimum disruption. BPM allows each department and there reports, demonstrating adherence companies to isolate specific rules was no cohesive or effective to legislation in an immediate, cost- that may be subject to change and coordination between these efficient way. More than 77% of treat them in a certain way, so that systems. For every purchase respondents who introduced BPM instead of having to rebuild an order, for example, people from with a view to improving compliance application or process each time three different departments used and risk management reported that legislation changes, it is possible to be involved and there was a the initiative had a positive impact to retain the 80-90% of rules that chance of violating commercial on their business in this regard. hardly change. For example, a or legal laws as compliance was BPM application can be adjusted only taken into consideration Capgemini view to reflect new legislation at at the end of the process, the end of each tax year, without rather than at every stage.” Rafts of new legislation in sectors having to rewrite the entire system. such as banking and are Deputy General Manager of , providing the impetus for the large utilities business, India

Figure 9. 77% of businesses that introduced BPM to improve compliance and risk management reported a positive impact.

What impact has this BPM initiative had on your business from the following perspective: Improvement of compliance and risk management?

39.0% 38.1%

12.7%

6.8% 2.5% 0.8%

A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact nor a negative impact

14 Customer-centricity

For consumer-facing businesses, the advent of new technology has radically changed the way in which they engage with their customers. In the age of always-on, ubiquitous access, companies have to respond faster than ever before.

43% of respondents 41% of respondents anticipated Companies are using Business Process anticipate that investment that their business would increase Management to support new ways in multi-channel access will investment in facilitating customer self- of interacting with customers. 78% increase over the next year. service over the next year. The figure of customers who introduced a BPM rises to 52% in banking, and 47% in the initiative with a view to improving telecommunications sector. Similarly interactions with clients reported 43% of respondents anticipate that that the impact on the business investment in multi-channel access was positive in this aspect. will increase over the next year, including 52% of respondents in the telecommunications sector.

Figure 10. Half of banking and communications organizations anticipate increasing investment in facilitating customer self-service over the next 12 months.

How will your investment in the following area change over the next 12 months: Facilitating customer self-service?

Banking TME

1.8% 2.6% 8.2% 10.3% 38.2% 40.5% 33.6% 31.0% 18.2% 15.5%

Invest much less Invest a little less Invest the same Invest a little more Invest much more

15 “Self-service is generally Figure 11. 78% of organizations who introduced BPM to improve interactions with clients cheaper. The number of reported a positive impact. Improving the interactions with clients and / or CRM. people being employed in What impact has this BPM initiative had on your business from the following perspective: call centers can be reduced. Improving interactions with clients and/or CRM? Younger customers in particular expect to be serviced through 41.8% emerging Web 2.0 channels.” 36.1% Systems Architect, enterprise level telecommunications business, Australia

“BPM combines business 10.7% processes, people and 5.7% 4.1% technology to achieve one 1.6% single goal: getting and keeping satisfied customers. It’s an A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact overall strategy to help you learn nor a negative more about your customers impact and their behavior so you can develop stronger, lasting relationships that will benefit both you and the customers.” Capgemini view BPM solutions are increasingly seen as CRM 2.0. BPM allows IT Consultant, enterprise level Customers are demanding more streamlined process for consumer products and retail more: More personalization and managing customer interactions business, North America customization, a broader range regardless of channel, all the way of engagement channels, greater through the front, middle and access to information and more say back office stages to resolution. in the buying process. Customers also expect recognition and a Example: Warranty consistent response, regardless management of what channel they are using. Organizations are increasingly One application of BPM that using BPM to respond to these benefits both vendor and changes. BPM is transforming customer is in the field of case management and moving warranty management in the into the traditional CRM space. automotive sector. Typically, Adding a BPM layer to existing administering warranties is processes helps address the clumsy and expensive, involving problem of case management by manufacturers, dealers, suppliers ensuring that all information is and customers. Information is integrated – stakeholders have a spread across myriad systems 360 degree view of all interactions and claims may be governed by with each customer. Companies different policies and procedures. are able to access the right data Application of a BPM solution in the right place and at the right unifies all information, allowing time. The appropriate response the streamlining of the full to different scenarios can be warranty management process. automated. Wherever customer care is involved, there is scope for BPM to make life easier for both vendor and customer.

16 Case Study – Business Process Management and customer-centricity Challenge: A Dutch software business which sells book-keeping and HR software wanted to improve customer retention.

The company redesigned its complaints procedure, Benefits of the approach adopting BPM software and thinking to improve internal communication between departments This rigorous complaints procedure has delivered tangible and external engagement with customers. . There is a higher level of customer retention. Complaints are far less likely to result in the cancellation of What the process looked like before subscriptions. In fact, the rate of subscription cancellation is actually 7% lower for customers who complained and For years the company had no central customer service had their problem addressed than for those who did not department. Customers were directed in an ad hoc fashion complain in the first place. Finally, there is a greater culture to either sales or product departments, depending on of cross-departmental collaboration within the organization. the nature of their complaint. The lack of process led to departments shifting responsibility for complaints. Employees gave inconsistent answers to customers posing similar questions due to lack of documented “Everyone in the organization was trying to procedure, causing confusion and further complaints. avoid taking any responsibility, saying ‘it’s not our department, it’s their department who What it looks like now should be dealing with it.’ That was a major issue – no one wanted to say to the customer, The company created a team dedicated to customer ‘I’ll take responsibility, I’ll make sure this goes service. Customers are presented with a telephone menu well, I’ll make sure that you’re happy’.” as soon as they dial in so that their complaint can be categorized. Customer services representatives note Complaints Manager down the details of problems in a case file. Cases are divided into ‘dissatisfactions’ and ‘complaints’ (which are more serious). Notifications are then sent to agents in departments such as technical support and sales with “We now invest the time to make customers the relevant expertise who follow up on the issues. The happy: a fundamental part of this is working as a more serious ‘complaints’ are dealt with at managerial company, not just as departments who are out for level. All agents have access to the same case file and themselves and care only about their targets.” all interactions are logged ensuring seamless sharing of information. The success of the execution of the Complaints Manager complaints procedure is measured quantitatively.

Issues encountered

Staff were initially resistant to this new process, which was perceived as bureaucratic. The sales department felt that handling complaints management hindered them in meeting targets. Different departments were unused to working collaboratively to solve problems.

17 18 Social media strategy

One area that was investigated in our BPM research was the level of emphasis that companies are placing on both the threat and opportunity from social media.

53% of respondents believe this “We need to introduce a system business driver will become more impact on customer’s daily lives to handle social media. At the important for their business over the and is here to stay. Through social moment one team writes down next 12 months. This figure rises listening and an effective Business mentions on post-its before to 60% in the United States, the Process , handing them over to another market which sets the pace in terms organizations ability to listen to the team to respond. You can of harnessing new forms of media conversation and respond through guess how efficient this is.” to improve business processes. changing business processes will become a major differentiator. Business Unit Manager, large Anecdotal evidence from the research, It is essential to combine social insurance business, Spain illustrated by the quotations, media data with unstructured shows how some large businesses and structured data from other “The power of social media have been caught off-guard by the sources to provide a holistic is rapidly increasing, which revolutionary effect that social and representative picture of means that it will become a media has had, and in particular what your customers are saying. focal point for all mass market the way that B2C organizations A social media strategy that is businesses. Market trends will interact with their customers. supported by an organization that be dictated by social media is able to rapidly alter business trends, and the public view of a There has been some complacency processes, listen to and identify company will be determined by in engaging with and investing in and manage risk early on, and its social media interaction.” social media. It is clear that businesses also provide sales opportunities must develop a social media strategy. will be an effective one. Enterprise Architect, enterprise level Organizations can no longer dictate the automotive business, Germany terms of engagement with customers – it is now customers who are in control of the conversation. In light of this Figure 12. 53% of businesses anticipate that social media strategy will become more loss of control, organizations need to important over the next 12 months. listen to and respond effectively to customer-initiated activity. Customers Which of these drivers do you think are likely to become more or less important over the next 12 months: Managing the opportunities and threats of social media? now expect a greater level of attention, as well as a near-instantaneous Total response. Businesses should also be USA aware of what a powerful asset this rich real-time feedback can be.

Capgemini view

Organizations are traditionally used to being in control of customer interactions and have long built IT systems that push messages to the customer. It is 2.3% 1.8% 5.9% 1.8% 39.2% 36.3% 31.6% 33.6% 21.1% 26.5% clear, however, that social media Become much Become a little Stay the same Become a little Become much and the consumerization of less important less important more important more important technology has already had an

19 Staff satisfaction

Large organizations are engaged in a continuous effort to create and sustain a rewarding working environment that mobilizes and motivates their staff. An important benefit of improved processes that emerged from this research is the impact on staff satisfaction.

“The previous management 75% of those organizations within underestimated process our sample that launched a BPM but also in terms of improving job development. Processes initiative with a view to improving satisfaction for the teams involved. weren’t documented. We staff satisfaction reported that the Alongside traditional ROI models had to repeat the same steps project had had a positive impact companies should consider the over and over again to reach in this regard. Strikingly, not one ease of use of resultant systems, a solution. Money and time respondent reported that the initiative the reduced cost of training were wasted, staff weren’t had had a negative impact. and the improved retention motivated and customers were of valuable team members. frustrated. Now we’ve improved Capgemini view our processes, all our staff are The quantitative research convinced of the benefits.” Enhanced staff satisfaction is an findings show that Business interesting ‘hidden benefit’ of Process Management initiatives Department Officer, enterprise process improvement. Enhanced can have a positive impact level insurance company, France staff experience is rarely built into on many different parts of an business cases for BPM investment. organization. The next section of However, removing laborious the research demonstrates how manual , reducing the BPM ultimately delivers value in need for ad-hoc intervention and terms of Return on Investment. making it easier for staff to operate efficiently, can have clear benefits, not just in terms of productivity

Figure 13. 75% of businesses who implemented BPM to improve staff satisfaction reported a positive impact on the business.

What impact has this BPM initiative had on your business from the following perspective: Improving staff satisfaction?

40.8%

33.8%

19.7%

5.6%

0.0% 0.0%

A very negative Quite a negative Neither a Quite a positive A very positive Don’t know impact impact positive impact impact impact nor a negative impact

20 Show me the money: BPM and Return on Investment The research demonstrates clearly that investment in Business Process Management can yield tangible business value. Of those respondents who had tried to measure ROI from BPM, a remarkable 96% reported a positive return, with 55% measuring a return of at least twice their initial investment.

“We consolidated by centralizing In the past, businesses found it difficult Figure 14. Just 39% of respondents have the IT infrastructure so that to quantify the Return on Investment attempted to measure ROI from BPM in a formal way. we didn’t have hundreds of from BPM programs as the benefits little silos everywhere. This were various and wide-ranging. Have you attempted to measure wasn’t a management power It can be a challenge to measure Return on Investment (ROI) from this BPM initiative in a formal way? trip, it was about saving a lot intangible but essential elements of of money. Ultimately, from BPM, such as cultural change and an economic perspective, employee behavior. Indeed, our Yes No Don’t know all the departments win.” research shows that businesses are still learning how to assess the value Senior VP for IT, consumer of a BPM investment, with only 39% 38.7% 29.0% products and retail Business, UK of respondents stating that they have tried to measure ROI in a formal way.

Capgemini view

Setting the business case for organizations is often challenging. Getting the appropriate balance 32.3% between the different objectives across the organization is key and rarely an easy task. However once objectives are set, and measurements in place, we have seen BPM programs delivering significant ROI. In addition, it is important to measure quantitative and qualitative factors when implementing BPM, and to track those measures through to completion of the project. Those results in turn inspire further change.

21 Figure 15. 96% of respondents calculated a positive ROI from investment in BPM. Examples of Return on Investment What level of ROI did you calculate for the BPM investment?

Cost reduction and Negative Return on Investment 1.9% efficiency gains:

No Return on BPM can help lower the cost Investment 1.9% of running, changing, and executing processes. Up to 1.5 times ROI 12.4%

A North American Between 1.5 and 24.8% insurance organization: 2 times ROI

Between 2 and 22.2% • Gained 40% cost reduction 3 times ROI over a five year period Between 3 and 12.0% 4 times ROI • Reduced training time from as long as two Between 4 and 9.0% weeks to just one day 5 times ROI

Between 5 and 4.1% • Gained ability to execute the 10 times ROI First Notice of Loss (FNOL) process with greater efficiency Greater than 10 times ROI 2.2% and accuracy as a result of increased automation Don’t know 9.0% • Introduced real-time analytics of overall claims operations An automotive company: • Reduced FNOL Total Cost of Ownership by approximately • Improved their cycle $12 million over the four years time by 50% following implementation A worldwide engineering • Was able to offer its organization: customers a market-leading claims experience • Ran a global operation to optimize and harmonize the A public sector organization: leading business processes and support, leading • Used sophisticated case to precise management to achieve planning and processing a win-back time of 70 minutes per case • Achieved real-time, end- to-end transparency Increase in competitiveness and agility • Established a more accurate process, with accelerated BPM reduces time-to-market for supply chain performance and new products and services. improved competitiveness

A global banking organization:

• Reduced time-to-market for new product release from nine months to four months

22 Speculating to accumulate: BPM as a counter-cyclical investment

The high level of Return on Investment that BPM can potentially deliver, discussed in the previous section of the report, perhaps explains why interest in BPM actually increases in relatively challenging market conditions.

“Growth via demand will be 68% of respondents who were seriously Figure 16. 68% of respondents considering difficult, so we have to improve considering investment in BPM state a BPM investment state that a more challenging economic climate over profitability by enhancing that a more challenging economic the next 12 months would increase the our internal processes.” climate would increase the attention attention their organization paid to process paid to process improvement. In improvement.

Risk Manager, enterprise level theory this is a simple equation: at If the economic climate in your sector manufacturing business, UK a time when it is difficult to acquire proved more challenging over the next 12 new business, process improvement months, what impact do you anticipate this would have on your organization’s offers a way to boost the bottom attitude to process improvement? line by making cost savings. We will pay a lot more attention However, challenging conditions can We will pay a little more attention create barriers to BPM adoption. If employees are concerned about job It will not impact on the attention paid security and their personal well-being, We will pay a little less attention BPM is more likely to be perceived as a We will pay a lot less attention threat rather than an opportunity. 44% Don’t know of respondents in the survey stated that resistance from staff responsible 6.4% for existing systems such as SAP and 2.5% 31.5% CRM within their organization was 5.6% a barrier to process improvement.2

17.9% Bottom line pressures can lead to a reductive focus on costs rather than an emphasis on the bigger picture. Money allocated to IT could be spent maintaining outdated systems that have no place in a modern technology environment. This is often a false economy. The BPM institute blog uses an apt analogy to explain the 36.1% likely consequence of trying to cut operational and process-related costs in the face of a downturn: “These organizations are just starving themselves, and it will likely come back to haunt them as the core infrastructure of the company – the corporate metabolism, is crippled to the point where it cannot function effectively.”3

23 “Even with the current economic 46% of survey respondents identified climate, middle and senior a lack of change readiness or management still find it difficult willingness at their organization as to embrace culture change, a barrier to improving processes.4 move with the times and take Reactive companies that are not advantage of the efficiencies ready to confront changing times will and cost savings that can not be able to introduce successful be delivered by BPM.” BPM. In order for a company to successfully deploy BPM, the Process Manager, local company must be able to embrace government agency, UK change across the organization.

In the following section of this report ways in which barriers “Companies in a defensive mode to BPM adoption can be broken simply aim to survive. BPM will down are examined further. seem too daunting for them – rather than investing in new tools and processes, they will cut IT Capgemini view budgets and try and muddle through with legacy tools in their BPM is not simply an out-of- existing format for a little longer.” the-box technological solution that can be introduced at will. Process Manager, enterprise BPM is a discipline that requires level telecommunications the adoption of a new cultural business, North America mindset. In a downturn, BPM is attractive to companies that are offensively orientated, and looking to push their business to grow. In order to introduce effective BPM, an organization must be receptive to change, willing to break its mould and become something different. Executive sponsorship is key to driving this forward.

One of the trends we have observed (though not suitable for all programs) is towards short term investments with fast ROI. BPM projects are often iterative – lasting 6-10 weeks per project, with each phase linked to a value based objective. In this context budget allocation is easier.

2 See Figure 21 3 http://www.bpminstitute.org/resources/white-papers/ bpm-ea-two-smart-investments-recession 4 See Figure 22

24 Barriers to BPM implementation

The research highlighted various practical issues which prevent organizations from successfully implementing BPM.

Five barriers in particular team all have their own targets and business domain. It requires will were identified: priorities. It requires a different and impetus to transcend ways way of looking at processes to make of working that are constructed • Functional silo culture them end-to-end more effective. around existing bureaucratic structures. Vision and leadership • Fragmented budget from a senior level is essential Capgemini view for long-term BPM success. • Perception of BPM as an IT item BPM-driven ways of working BPM implementation renders the can then add value to a business • Resistance to BPM from IT greatest value when it is applied by linking functional silos and staff who have responsibility across organizations and across eradicating the inefficiency of for existing systems applications. However initiatives different business units working tend to deal with one subset of in competition with one another • A lack of change readiness processes because it is much easier on disconnected projects. or willingness to gain sponsorship for a process improvement initiative within a All these internal barriers to cooperation must be addressed in order to achieve commonality of purpose, which can directly contribute to business value. Figure 17. 55% of businesses state that functional silo culture is a barrier to process improvement.

Functional silo culture To what extent do you agree that these barriers to process improvement exist in your organization: Different parts of the organization tend to operate in functional silos? 55% of respondents identified functional silo culture as a barrier to process improvement at their organization, making it the most frequently cited obstacle. Survey respondents who had experience of BPM initiatives explained how before Strongly agree introducing BPM, organizations were compartmentalized into functional Slightly agree units, with objectives and performance measures broken down accordingly. Neither agree nor disagree Don’t know This method of working promotes efficiency within a particular silo, Slightly disagree but undermines the possibilities for Strongly disagree 3.2% 6.6% 24.7% 32.1% 23.0% 10.3% working collaboratively and seamlessly across an organization. The attempt to introduce cross-functional BPM can lead to internal politics. For example, when a retailer attempts to improve cross-channel access, addressing the issue is immediately problematic because the online-channel owner, in-store channel owner, telephone- channel owner and customer service

25 “In telecoms, the new buzzword Perception of BPM as an IT item Capgemini view is an “integrated supply chain”, how to take everything from The survey findings indicate that BPM programs need to be driven manufacturing, , there is little consensus across by a collaborative team of IT logistics etc. and put that all organizations as to who should and business. Business should together under one ownership. take primary responsibility for drive the business case, the In practice it never works like process improvement. In different process and outcomes, that. At the moment we have organizations across the sample, this and IT needs to supply the an operations organization, was borne variously by IT, business infrastructure, core systems a procurement organization, management, operations, or even and integration expertise. BPM a logistics organization dedicated process management brings the two – business and IT – and a delivery function all units. In many instances, budget together, to make those decisions operating in different silos. is fragmented across departments, jointly. It also creates a common All departments affected by a which can undermine the environment which serves to process should work together.” effectiveness of attempts to launch eliminate the communication coherent, cross-functional process barriers that traditional tools Head of Logistics, enterprise management initiatives. and methods tend to amplify. level telecommunications business, North America 48% of respondents identified the perception of BPM as an IT item as a barrier to effective process improvement. The figure is higher “Different departments in certain European markets such were taking decisions in as Italy, where it rises to 54%. their own way, with their own Perception of BPM as an IT item can philosophies and objectives. hinder implementation as while This created a lot of tensions many of the costs and challenges and processes became stuck.” fall on the IT side, the principal benefits fall on the business side. Customer Services Manager, medium sized software business, Netherlands Figure 18. Perception of BPM as an IT item is deemed a barrier to process improvement by almost half of respondents.

To what extent do you agree that these barriers to process improvement exist in your organization: BPM is still seen too much as an IT item?

Strongly agree Slightly agree

Neither agree nor disagree Don’t know

Slightly disagree

Strongly4.4% disagree 10.8% 28.7% 29.6% 17.9% 8.7%

26 Figure 19. Allocation for process improvement is often split across organizations. Resistance from staff responsible for existing systems Which parts of the business hold the budget for process improvement? One potential hurdle to BPM implementation is that BPM gives power to the business side of an organization rather than the IT 19.5% 19.9% department. 44% of respondents found that resistance from staff responsible for existing systems was a barrier to successful process improvement. IT departments will naturally be IT 27.1% Operations protective of current tools, and argue that these can achieve value.

Capgemini view 15.3% The introduction of BPM 19.5% Senior business technology will change the management applications landscape and there Individual will often be internal resistance to business units this. Ultimately, BPM technology 12.7% Finance will serve to create value for the organization as a whole and create 4.6% alignment between business and IT. However, it is important HR manager Dedicated process 21.0% management unit to engage the CIO and IT staff in BPM strategy to ensure that these stakeholders do not feel n.b. Respondents were able to select more than one they are relinquishing control. In answer, as budgets can be split across departments, forward-thinking organizations hence the overall percentage response sums to more Don’t know than 100%. where staff view change as an opportunity rather than a threat there is the best chance of Figure 20. There is little consensus across organizations as to who should take primary responsibility for process improvement. successful BPM implementation.

Which of the following take primary responsibility for process optimization?

“The biggest challenge we had was actually the human aspect, not the systems and technical 13.1% 3.1% aspect. We were suddenly 16.3% saying ‘you’re not in charge HR manager of the network anymore, we Operations are.’ You’ve got to make sure 18.2% everyone’s ok about it before IT you can move forward.”

3.6% 15.6% Senior VP for IT, consumer Senior business Finance products and retail, UK management

12.8% 5.3% Don’t know

11.9% None of the above Individual business units Dedicated process management unit 27 “There was opposition in Figure 21. 44% of respondents found that resistance from staff responsible for existing the company from different systems was a barrier to successful process improvement. departments. People were To what extent do you agree that these barriers to process improvement exist in your worried because their discretion organization: There is resistance from IT staff who have responsibility for existing systems over their systems was being (SAP, CRM)? wiped out. There was also concern that manpower would be declared surplus as we put systems in place to do the work they had done previously.”

Slightly agree Deputy General Manager of Finance, Strongly agree large utilities business, India

Neither agree nor disagree Lack of change readiness Don’t know Slightly disagree / willingness

46% of respondents identified a lack of Strongly disagree6.6% 12.4% 27.0% 27.7% 15.9% 10.5% change readiness or change willingness at their organization as a barrier to BPM adoption. Organizations which Figure 22. 46% of respondents identified a lack of change readiness or change willingness have adequately functioning processes at their organization as a barrier to BPM adoption. can easily become complacent, and To what extent do you agree that these barriers to process improvement exist in your fail to acknowledge the need for organization: There is a lack of change readiness and/or change willingness in the continuous improvement, leaving organization? them vulnerable to being overtaken by the competition. Companies with an apparently well-functioning application landscape can lack the vision and appetite for a step change.

Strongly agree

Capgemini view Slightly agree

A BPM implementation may

appear to offer radical change for Neither agree nor disagree Don’t know marginal return. Whereas when implemented carefully, it can offer Slightly disagree organizations a step change in the Strongly disagree way they are able to do business. 6.4% 11.7% 25.2% 29.5% 16.5% 10.7%

Large organizations that are processes, minimizing disruption accustomed to acting in a and ensuring continuity while particular way can also be wary facilitating process improvement. of overhauling and updating Business process and rules are processes because business rules captured and made explicit, and and business knowledge may be systems become self-documenting. embedded into long-standing Staff with the appropriate processes. In some instances authorizations can then maintain these rules may not be formally and amend processes and rules documented, so stakeholders are that are no longer hidden away concerned that when migrating in arcane coding languages. to new system, the full range of functionality may not be Capgemini recommendations captured. The great strength of for breaking down barriers and BPM is that it captures and builds successfully implementing BPM on existing ways of working, are summarized on the next page. renewing rather than usurping old 28 Key conclusions and recommendations

BPM offers high value through process optimization – but first, organizations need to create the conditions for success

At a time when many market sectors are facing slow Define strategic objectives for BPM revenue growth, customer churn, and increased pressures on costs, BPM is a critical weapon in the battle BPM succeeds best when it is executed against clear business for efficient, effective processes that cost less. It allows objectives. Organizations embark on BPM programs for organizations to become more customer-centric, and to different reasons, and so each business must identify and respond in a more agile way to business challenges and prioritize its own strategic objectives up front. Involving opportunities, however uncertain the business environment. senior management in this process is an important way to Other benefits include better regulatory compliance, ensure that they take ownership of the subsequent program. even where regulations are altering almost daily. Possible objectives can be grouped into three clusters: All this adds up to an exceptional ROI for successful BPM programs – one that can often make it 1. Cost reduction, efficiency, and effectiveness possible to buck gloomy economic trends. 2. Customer-centricity and agility, for example Before an organization can realize BPM’s potential, in adapting to changing market conditions there are usually some challenges to overcome. These typically include a silo-based and 3. Compliance with rapidly-evolving regulations culture, resistance to change on the part of stakeholders, and fragmented process improvement budgets. Objectives should relate to the business as a whole, and not just to individual functions. Setting the right Below, we make some recommendations for objectives, and then managing against them, helps the positioning an organization to overcome the organization to work as a single entity, rather than in silos. challenges and realize BPM’s promise. Build a business case for BPM Get C-level sponsorship The business case for a given BPM initiative will vary Strong vision and leadership at the C-level are the key to depending on the organization’s objectives, as well as its overcoming barriers between organizational silos to create an maturity with regard to BPM. Involving senior managers environment for BPM success. Without senior management in the process of building the business case, as opposed sponsorship, a BPM initiative is usually doomed before to simply presenting them with the end result, will it even starts. Securing C-level sponsorship can itself be help to gain C-level ownership of BPM initiatives. difficult, particularly if the people who really “get” BPM find it hard to communicate the potential in business terms. The The business case should balance the requirements of process of jointly defining objectives and a business case, as different parts of the organization as far as possible. On recommended below, can improve communication and build the benefits side, it should take account of “soft” benefits the vital senior buy-in. such as improved staff satisfaction and retention, and reduced cost of training, as well as financial benefits.

A crucial element of the business case should be a roadmap with delivery milestones, to show when benefits will be realized. Goals should be clear, measureable, and realistic. For those organizations starting out on BPM, our recommendation is to think big, start small, and scale rapidly. It is similarly important to measure post-implementationto establish when benefits are actually realized and recognize success.

29 Establish governance Realize and communicate benefits

Successful BPM requires governance at an operational It is critical to track and manage BPM progress against level. The CIO needs to provide vision and direction, the business case, ensuring that objectives are being met, and be willing to do so if he or she has engaged in the milestones achieved, and benefits realized. Measurement process of objectives definition and business case needs to be qualitative (e.g. through customer and construction described above. Even so, a senior executive staff satisfaction surveys) as well as quantitative (e.g. is unlikely to be able to provide the constant day-today through measurement of cost reductions) – both types of involvement and decision-making that is required. measurement will have been defined in the business case. Day-to-day decisions on projects and programs therefore need to be made by a well structured, cross-functional Demonstrating value early on in a project is the best way to team of IT and business representatives, mediated by a support the case for continuing it. In addition, demonstrating steering committee of senior sponsors and stakeholders. success on one project is likely to inspire others to follow suit.

Integrate new and existing technology Give BPM organization-wide reach

BPM depends on the correct alignment of technology Although success breeds success, organization-wide solutions with the business case. New BPM tools adoption of BPM is rare unless patches of success and and suites are likely to be implemented, but most fragmented budgets are brought together to create organizations will also need to take into account a organization-wide awareness, enable a repeatable complex landscape of legacy back office applications. experience and reuse of components to build momentum and further reduce costs. One way to Usually there is no need for dramatic “rip and replace” do this is by setting up a center of excellence. Again, systems migrations. Instead, the emphasis will be on C-level sponsorship is essential to make it happen. leveraging the investment in existing solutions using BPM to augment, and plug execution gaps in, legacy applications.. In summary In other words, the deployment of an agile BPM layer can modernize, and extend the functionality of, legacy systems. To achieve the potential value of BPM, organizations must first create the conditions for success. That means Manage cultural change securing and using senior sponsorship, rigorously defining organization-wide strategic objectives BPM is not an out-of-the-box technical solution. It requires and a business case, and putting in place the right the adoption of a new culture and mindset on the part governance structures and the right technology. The of both business (who will operate the new processes) BPM process must be purposefully managed throughout and IT (who are responsible for existing systems). to ensure that the intended benefits are realized and Both of these groups will need to adopt a new model of communicated. Budgets and resources may need to be collaborative working. We strongly believe that BPM as a integrated and/or centralized to achieve wider reach. discipline needs to be jointly owned by business and IT. C-level commitment and strong skills It follows that stakeholders from both business and IT are essential to bring about the required cultural change, must be ready and willing to embrace change. Initially including the move to greater cross-functional collaboration. there is often resistance, but if C-level managers have taken ownership of BPM it will be easier to gain the Under the right conditions, BPM can deliver exceptional commitment of other staff members. Even so, managing value that more than justifies the effort involved, cultural change is one of the most challenging aspects as the experience of early adopters confirms. of BPM implementation, particularly where internal politics get in the way of cross-functional collaboration.

30 31 Capgemini sector and country focus

BPM as a management discipline can offer organizations – both private and public sector – a way of underpinning their processes in order to deliver high value to the business.

In the second section of the report, The sectors profiled are: We also explore BPM trends and we take an in-depth look at the practices from a regional perspective application of BPM in five specific • Financial services in the following geographies: market sectors that are of particular interest. The level of BPM adoption, • Public sector • United Kingdom and drivers of interest in BPM thinking, vary across market verticals. • Manufacturing, automotive • United States and life sciences • Australia • Consumer products and retail • Germany • Telecommunications, media and entertainment • Italy

• France

• Spain

• The Nordics

• The Netherlands

32 Financial services

Our survey shows that the financial services sector leads the way in adoption of Business Process Management software and approaches: 65% of financial services decision-makers that participated in the survey stated that their organization had launched a BPM initiative of some description, while 52% anticipated that greater emphasis would be placed on BPM over the next year.

Figure 23. More than half of financial services respondents believe their organization will place greater emphasis on BPM over the next year.

How do you anticipate that the current level of interest in BPM within your organization will change over the next year?

A lot more emphasis will be placed on Business 18.8% Process Management over the next year

A little more emphasis will be placed on Business Process Management 32.7% Nicholas Kitson, Head of Business over the next year Process Management, Global The same amount of emphasis Financial Services Unit, Capgemini will be placed on Business Process Management over the 27.3% next year

The effects of the global financial A little less emphasis will be placed on Business crisis still loom over financial services Process Management 4.2% providers. Shortcomings in regulation over the next year of the sector have been brought A lot less emphasis will into sharp focus by the economic be placed on Business 3.6% Process Management downturn, which has also forced over the next year financial players of all stripes to reassess their cost position and the Don’t know 13.3% ways in which they fight for market share. Players in banking, insurance and capital markets have all been Solvency II. The problem facing 62% of decision-makers in the forced to scrutinize their processes these financial institutions is how financial services sector indicate and Business Process Management to gain and maintain compliance that responding to changes in thinking has become more relevant in a fluid regulatory environment, legislation will become a more than ever to these institutions. while at the same time satisfying the important driver for their business demands of customers for swift and over the next 12 months. Financial services efficient service. 62% of decision- and compliance makers in the financial services sector that participated in the survey “FSA legislation has become The past few years have witnessed anticipated that responding to tighter and this impacts vociferous demand for the creation changes in legislation would become the sales process and the of new legislation in financial a more important driver for their techniques in place.” services. By 2013, banks will need business over the next 12 months. to demonstrate their compliance Process Manager, to the new Basel III standards on large insurance business, UK capital adequacy; similarly, by 2014, insurance companies will need to demonstrate compliance with

33 “We talk to people around risk, BPM allows financial services to controlled approach to the credit compliance, Solvency, Basel... fuse regulations with processes. process by facilitating continuity of they understand the issues Organizations can build compliance to work across different departments and they know they will need to these new regulations into a repeatable, and different channels. Furthermore, do something around it. They measurable framework. This eliminates BPM also allows the business to grasp that there’s a deadline the need to impose compliance monitor how efficiently and accurately by which they need to address controls manually in an ad-hoc fashion, these processes are carried out. these issues and if they don’t reducing error and minimizing they will be punished.” time and resources that need to be Since the downturn, insurance dedicated to regulatory demands. companies have been under pressure Capgemini BPM specialist, Spain to reduce operational and acquisition BPM allows financial services firms costs to assure sustainable growth to respond to government demands and profits. Legacy IT infrastructure 73% of financial services by demonstrating compliance at insurance companies is unable to decision-makers who took part automatically. BPM also allows handle the increasing complexity in the survey anticipated that continuous change and different in claims processing that is driven maximizing cost-efficiency layers of customization: this means by a combination of technological would become a more that rules can be refined to meet innovation, a challenging external important business priority different requirements in geography environment and regulatory change. over the next 12 months. or product. It also affords firms the Processes frequently require multiple scope and flexibility to meet elements hand-offs and duplication and of future compliance which have yet redundancy are rife. This explains “We want to replace things to be precisely defined, and to model why insurers are embracing BPM that don’t work, maximizing these intelligently in advance to see technology, which unpicks the knots cost-efficiency by paying more what the implications may be. that form in historically evolved now to save more later.” processes, enhancing process Financial services and efficiency and cost effectiveness , cost-efficiency and allowing measurement of the large insurance business, USA success of claims processes. In the aftermath of the economic

downturn, financial institutions are “Harmonizing processes focusing on cost reduction. Business across different divisions and Process Management allows financial subsidiaries will save costs.” services companies to automate labor-intensive manual tasks, saving Compliance Officer, times and resources and boosting enterprise level bank, Australia efficiency. 73% of financial services firms in the survey anticipated that maximizing cost-efficiency would become a more important priority over the next 12 months.

In the retail banking sector, incorporating front-end activities like Loan Origination into BPM systems ensures superior integration with back office functions. When this type of process is carried out manually, there is inevitable duplication of work and inaccuracy. The disconnection between separate back office and point of sales systems causes unnecessary re-checking by staff at different parts of the process, while the ongoing battle to reconcile different pieces of paper leads to errors. BPM allows banks to build a standardized, quality

34 Financial services and The Capgemini World Insurance From the perspective of customers customer-centricity Report 2011 states: “Insurers’ of a bank, running processes like reputations live or die by their ability mortgage and loan applications in a In these leaner times, both banks to process claims efficiently and BPM tool speeds up the process and 5 and insurance companies are effectively.” A bad claims experience eliminates the kind of mechanical fighting to increase market share. drives clients to competitors, a errors which damage perception of a Consequently, they are working on dynamic that is especially costly for brand. It can also increase the scope topics related to customer front end, insurers given that it costs seven times for cross-channel service provision, many of which can be driven by a as much to acquire a new customer for example the sending of text BPM solution. 79% of respondents as it does to serve an existing one. messages to confirm transactions. from financial services firms in BPM joins up different business units, the survey stated that increasing streamlining claims processes by 5 Capgemini World Insurance Report, 2011 the number of channels through removing internal barriers and sharing which customers can interact with salient information across different the business is an important driver. parts of a business, largely automating Similarly, 78% of these respondents much of the claims process. From the stated that facilitating customer self customer perspective, this removal of service is an important driver. manual work and duplication leads to shorter claims-processing time, and a more accurate and transparent claims calculation – the end result is greater customer satisfaction and retention.

Figure 24. Facilitating customer self-service and enhancing multi-channel access are key business drivers for financial services organizations.

Please identify how important each of the following drivers are for your business: Increasing the number of channels through which customers can interact with the business; Facilitating customers self-service.

4.2% 1.2% Not very Not at all important important 15.8% Neither important nor 34.5% unimportant Very important Increasing no of channels for customer interaction

3.6% 44.2% 6.7% Not at all Quite important Not very important important 38.2% Very important 11.5% Neither important nor unimportant Facilitating customer self-service

40.0% Quite important

35 Public sector

Governments are facing considerable pressures in 2012. The economic downturn in many countries means that public sector spending is constrained. Legislation is constantly changing, and technological change means that citizens expect a greater say in decision-making.

is frequently invoked. At the moment The systems that governments use, public sector agencies in many markets for example to process welfare claims, are facing unprecedented budgetary are under constant strain as time- pressures. More than one in three consuming manual intervention is public sector respondents anticipated needed to keep up with the moving that maximizing cost-efficiency would target of legislation. The adoption of a become much more important to their joined-up BPM approach eliminates organization over the next 12 months. the cracks that appear in hand-offs In countries which are facing seriously between people and departments that Nico Kaptein, Operations Director, reduced government spending, this lead to costly waste. BPM can also give Global Public Security, Capgemini figure is much higher – in the UK, government agencies the ability to more than two in three public sector change rules dynamically to keep up decision-makers anticipated that with the latest directives, eliminating Governments must attempt to deliver maximizing cost-efficiency would mistakes and reducing work. more efficient and transparent citizen become much more important. services whilst driving down costs, but they are regularly hamstrung in Figure 25. Maximizing cost-efficiency will become more important to public sector this attempt by outdated technologies organizations over the next 12 months. and outmoded ways of working. This context explains the growing relevance Which of these drivers do you think are likely to become more or less important over the next 12 months: maximizing cost efficiency? of BPM paradigms to the public sector.

Citizen-centricity

Many governments are increasingly focusing on delivering an enhanced level of citizen-centric service. 30.7% Citizens expect the kind of 24 hour, 35.5% multi-channel service they are used to receiving in the private sector. In healthcare, for example, good case management practice can be applied to treatment of patients, which can require the contribution of a spectrum Stay the same of different people with specialized Much more important roles. BPM can address the information 5.2% silos that exist within enormously complicated organizations like tax A little less important bodies allowing continuity of work 27.8% by different agents in the process. 2.8%

The elimination of waste is a Much less important perennially hot topic in the public sector, and the idea of efficiency savings A little more important

36 In many markets, such as the 29% of public sector decision- Netherlands, public-private makers anticipate increasing are viewed by investment in social media governments as a way of improving strategy. efficiency. There is an erosion of the gap between the public and private spheres. This trend will drive governments “Social media will have more to move away from closed networks impact on the public sector towards platforms which facilitate than people realize right now. interaction with partners: this will Delivering services must be further fuel a move towards more efficient, so it is important open systems, which will in turn make to facilitate self-service.” BPM a logical choice of platform. IT Manager, central government Social Media Strategy agency, Netherlands

Governments in the English-speaking world, and Northern Europe, are beginning to explore how they can harness social media potential for the benefit of their citizens. Understanding of how to engage with social media is admittedly still in its infancy in government, with only 29% of public sector decision-makers anticipating increasing investment in social media strategy. However, during our research, interesting hypothetical examples of how governments might use the technology emerged, which suggested that this could well be a growth area in the near future. For example, police forces might explore how they can make constructive use of the wealth of unstructured data that emerges from digital sources to aid crime prevention. A BPM platform can allow the swift and seamless integration of relevant social media data into conventional processes.

37 Manufacturing, automotive and life sciences

The survey findings show that decision-makers in the sector Capgemini groups together as manufacturing, automotive and life sciences are relatively more likely than the rest of the sample to have knowledge and experience of Business Process Management.

Process to Value” explains, at these Three key business priorities companies “years of globalization and emerge from the research for large expansion – some organic, but much manufacturing, automotive and of it through life sciences organizations: – have resulted in complexity in the , redundancy in • Harmonizing business processes systems and processes, and a lack of transparency and flexibility in • Maximizing cost-efficiency processes”. The pressure to move from a Ard Jan Vethman, heterogeneous, non-integrated systems • Optimizing time-to-market Principal Consultant, landscape to a unified environment Manufacturing, Automotive and is often acute and affects the whole 82.3% of respondents in the Life Sciences, Capgemini business, hence the importance of sample stressed the importance of strategic sponsorship at the top level. harmonizing business processes. This is no surprise, as organic growth One survey participant in three in different parts of multinational stated that they “know a lot about Business Process Management and have plenty of practical experience of Figure 26. In the manufacturing, automotive and life sciences sector, one respondent in it.” This demonstrates the relevance three has extensive knowledge of BPM. of the discipline to the manufacturing industry, which is addressing the need How would you describe your level of knowledge of Business Process Management? to reduce costs, boost operational efficiency and optimize time-to-market I do not have much knowledge or practical 15.9% in the wake of the economic downturn. experience of Business Process Management The manufacturing, automotive and I have some knowledge life sciences vertical is advanced in of Business Process Management but no 19.5% having process ownership that goes practical experience of it all the way to board-level. This is illustrated by the fact that respondents I have some knowledge in this sector, more than any other, of Business Process Management and limited 28.3% are likely to stress that decisions practical experience of it regarding process improvement should be taken at the C-level. 72% I know a lot about Business Process Management of respondents in manufacturing, and have plenty of 31.9% automotive and life sciences indicate practical experience of it that they believe BPM should be treated as a C-level concern, compared with 61% of the overall sample. As the Don’t know 4.4% Capgemini report “Business Process Management in Manufacturing: From

38 companies often leads to the Figure 27. 82% of manufacturing, automotive and life sciences respondents stressed the development of local processes for importance of harmonizing business processes. distribution, sales and . BPM Please identify how important each of the following drivers are for your business: can provide extra value by allowing Harmonizing business processes. companies to strike a fine balance between necessary and beneficial centralization of processes, and 46.9% flexibility for adaption to specific local or departmental circumstances. There has been a longstanding drive for 35.4% harmonization in the manufacturing space, but BPM technology allows for different layers of harmonization.

Maximizing cost-efficiency is similarly a key driver for manufacturing, automotive and life 14.2% sciences companies, with emphasis on integrating supply chain and non-core functions. The flexibility that BPM provides 1.8% 1.8% for collaboration with partners is very relevant to organizations in Not at all Not very Neither Quite important Very important these sectors with regard to both important important important nor unimportant distribution and supply chain. BPM can help break down the silos “We need to streamline even that occur in the supply chain and further to create better products ensure that all functions are aligned in less time to stay in business. towards the same delivery goals. Without process improvement we won’t stay competitive in Optimizing cycle time is invariably this business environment.” a priority for organizations in this sector: this was especially top of Enterprise Architect, enterprise level mind for automotive organizations automotive business, Germany surveyed. It is no surprise that 57.5% of decision-makers in these sectors anticipate increasing investment in optimizing time-to-market over “We are struggling to survive the next 12 months. It is easier to in a competitive market put together a business case when segment. Global harmonization there has already been a focus on is important to create new such a quantifiable metric. BPM opportunities for our business.” also allows for greater transparency around processes, and rich, real-time Business Analyst, enterprise level measurement of performance. manufacturing business, Netherlands

Further discussion of BPM maturity in manufacturing can be found in this Capgemini report, “Business Process Management in Manufacturing: From Process to Value.” www.uk.capgemini.com/insights-and-resources/ by-publication/business-process-management- in-manufacturing-from-process-to-value/

39 Consumer products and retail

Understanding of the relevance of BPM thinking and technology is less mature in the retail arena than in other industries.

Increasing the number of channels enhance the customer experience. through which customers can interact This is driving interest in combining with the business was deemed an BPM and CRM systems at top retailers important business driver for 73% for whom outstanding service is a of decision-makers in the consumer priority. This is also relevant to the products and retail space. A BPM increasing number of consumer framework can help facilitate this products companies which have by linking the information silos that “direct-to-consumer” channels. exist around different channels. Brian Girouard, Global Consumer BPM allows seamless sharing of data, Products and Retail, Capgemini so all information relating to one customer can be logged in a single, easily accessible location. This helps This is illustrated by our research avoid the inevitable frustrations that which shows that fewer than one in occur when a customer is passed five consumer products and retail from one operator to another due to decision-makers believe that BPM is inconsistent or incomplete sharing currently an important agenda item of information. Customer service at the managerial level. There is still a representatives can even be prompted sense that retail, in particular, is less with useful contextual information of a science and more of an art, less about customers at appropriate rigorous and structured than other junctures during interactions to industries. Some of the participants in this survey stressed the importance of personal interaction in retail and Figure 28. Increasing the number of channels through which customers can interact with refuted the notion that it could be the business was deemed an important business driver for 73% of consumer products and reduced to mere process. However, retail respondents. conundrums that are top-of-mind Please identify how important each of the following drivers are for your business: Increasing for retailers, like facilitating seamless the number of channels through which customers can interact with the business. all-channel access and harnessing the transformative power of social media, are all excellent candidates for applying a BPM framework.

36.5% 36.5%

20.0%

7.1%

0.0%

Not at all Not very Neither Quite important Very important important important important nor unimportant 40 Online media strategy is fast becoming Figure 29. 70% of consumer products and retail respondents view social media strategy as a top priority for retailers. 46% of an important business driver. survey participants in the consumer Please identify how important each of the following drivers are for your business: Managing products and retail vertical anticipated the opportunities and threats of social media. increasing investment in managing the opportunities and threats of social media – more than in any other sector. 47.1% This is not surprising given that 70% view this as an important driver for the sector. Front end applications that deliver a CRM-type service increasingly have to incorporate social media, and these are best integrated into wider architecture via a BPM 22.4% platform. In verticals where word- 21.2% of-mouth has traditionally been important, the echo chamber effect of the social media space demands attention. BPM allows customers to 8.2% build processes to mitigate negative word of mouth or to amplify positive 1.2% chatter. Feedback received through these channels can be categorized Not at all Not very Neither Quite important Very important and appropriate responses executed. important important important nor unimportant The success of this type of activity can be monitored and managed. Many “Our business is moving into traditional offline retailers are daunted multi-channel retailing therefore by the alchemy of new types of media, the need for social media but interactions in this space can be exposure is greater than ever.” efficiently standardized and structured using BPM approaches and tools. Department Officer, enterprise level retailer, Australia

“Customer self-service is important from a customer perspective as it makes life easier, and a company perspective, as it minimizes cost, driving profit.”

Compliance Officer, large retailer, Italy

41 Telecommunications, media and entertainment

The telecommunications, media and entertainment (TME) sector has lagged behind other sectors such as banking and manufacturing in adoption of BPM thinking and technology.

Figure 30. Half of respondents in the communications sector anticipate increased interest in BPM at their organization over the next 12 months.

How do you anticipate that the current level of interest in BPM within your organization will change over the next year?

16.4% Jean-Marc Steffann, Vice President, Global Telecom, Media and Entertainment, Capgemini 34.5% A lot more emphasis

Our research shows that the sector may catch up quickly as half of decision- 0.9% makers anticipate increased interest A lot less emphasis in BPM from their organization in 23.3% the near future. The TME industry A little more emphasis is facing a number of challenges that are fuelling interest in BPM. 3.4%

The research findings show that more 21.6% The same amount A little less emphasis than two in three telecommunications, of emphasis media and entertainment companies anticipate that maximizing cost- efficiency will become increasingly important. The market is highly Don’t know saturated and revenue is likely to remain flat. Resulting pressure on margins is forcing TME will come under further pressure, players to focus on operational as both businesses and consumers efficiency and cost reduction. look to cut back on expenses and the risk of non-payment increases. BPM allows TME companies to reduce costs by automating processes, This is reflected by the finding that 72% integrating front and back office of companies in the sector state that a functions and connecting all the challenging economic climate over the inputs necessary to complete a task. If next 12 months will prompt greater there is a further market downturn in interest in process improvement. developed markets, TME companies

42 Product convergence in the This will provide another “We are thinking closely about telecommunications, media and incentive for TME companies to what BPM can do for us right entertainment spaces, enabled by migrate from cumbersome, closed now. The size and age of our regulatory change, means that TME legacy systems towards an open organization means that there companies are increasingly trying to architecture that allows efficient are a multitude of separate siloed sell convergent triple play or quadruple integration with other parties. processes and systems which play products. Major players who have proved difficult to replace originated in different spaces are without negatively impacting jostling to offer mobile, fixed line, customers. We currently have Broadband, and Pay TV. This case parallel streams of challenge is compounded and processes for legacy by increased customer demand to customers and new or migrated access accounts via multiple channels, customers which is difficult, not from store to Smartphone app – more to mention costly, to manage.” than half of decision-makers who participated in the research anticipate Systems Architect, enterprise investing more in facilitating multi- level telecommunications channel access for their customers. company, Australia This necessitates radical changes to systems architecture as companies Figure 31. 72% of companies in the communications sector state that a challenging attempt to reconcile several pre- economic climate over the next 12 months will prompt greater interest in process existing processes for account improvement. creation and account management. If the economic climate in your sector proved more challenging over the next 12 months, BPM allows businesses to handle what impact do you anticipate this would have on your organization’s attitude to process the complexity of required account improvement? management processes. Information silos that have traditionally existed We will pay a lot more attention around different products, or between We will pay a little more attention channels, can be broken down, and It will not impact on the attention paid each customer interaction treated 8.3% We will pay a little less attention as part of a seamless dialogue. 1.7% We will pay a lot less attention 1.7% Consumer behavior is constantly Don’t know 36.7% changing in this market as technology evolves: TME companies consequently need to bring products to market as quickly as possible if they are to 16.7% secure their share of the benefits. 66% of respondents at these companies anticipated that reducing time-to-market would become a more important priority for their organization in the next 12 months. This shows that companies urgently need to invest in infrastructure to support shorter cycle times. The use of a BPM framework allows telecoms 35.0% players to maximize business agility and respond swiftly to market opportunities. The development of these new products also means that TME companies are being forced to join forces with an array of new partners, from applications developers to financial services companies.

43 44 Country analysis

significant opportunity for process over the next year. Market conditions improvement. 1 in 5 of the survey which are tougher than anticipated participants stated that BPM is an will put pressure on margins, forcing important agenda item at managerial businesses to scrutinize their cost level which is consistent with the position further. Indeed, of those broader picture across the sample. businesses that are considering a BPM implementation, 89% state that more The research suggests that there may be challenging economic conditions some opportunities for BPM to flourish. will prompt them to pay greater Lee Beardmore, Head of Business The UK is a world leader in financial attention to process improvement. Process Management, Capgemini, UK services, which comprises roughly 10% of the country’s economy. The sector, whose revenue growth has been 44% of the survey respondents driven in part by a generation’s worth anticipate that the level of interest United Kingdom of deregulation, now faces the prospect in BPM within the organization of both increased oversight, and cost- will increase within the next year. Fundamental changes are taking place cutting as a response to tougher market in the UK economy as the country conditions. Consequently, much of the 67% of survey respondents in struggles to recover from the economic BPM adoption in the UK has occurred the public sector believe that downturn and avoid further recession. in the financial services sector. maximizing cost-efficiency will The British media talks loudly about become much more important an “Age of Austerity”. The private Agencies in the public sector in the over the next 12 months. sector is contending with a great deal UK, which is witnessing the greatest of market uncertainty, while jobs retrenchment in government spending are being cut from the public sector, since the 1940s, are becoming and the influential financial sector increasingly aware of and receptive to is contending with new regulatory the benefits that a BPM approach can pressure. Driving growth, responding confer. Two-thirds of public sector to market contraction and gaining survey respondents indicated that new efficiencies from the workforce maximizing cost-efficiency would all demand new ways of working. continue to grow in importance The research indicates that BPM will over the next 12 months, which is have a role to play in addressing such driving interest in BPM investments. challenges. Indeed, 44% of survey The incumbent government is respondents anticipated that interest also particularly interested in in BPM within their organization public and private organizations would increase within the next year, partnering to deliver state services. while 1 in 3 anticipates that their This impetus towards collaboration organization will launch a major drives interest in moving away from BPM initiative in the same period. closed legacy systems towards the more open kind of environment The research indicates that knowledge that can be facilitated by BPM. of Business Process Management in the UK is not as developed as in more There is still plenty of conjecture as mature markets such as the USA. to how the UK economy will fare in Only 16% of the UK decision-makers the medium term; macroeconomic who participated in the research events in the Eurozone and the wider had plenty of practical experience global economy will impact on the of the topic, compared with 28% prospects for recovery. Consequently, in Germany and 32% in the USA. more than three in four UK businesses Interestingly only 9% stated that believe that ability to react to changes their processes are ‘Optimizing’ in market conditions will be an which indicates that the UK still has important driver of business success

45 that participated in the survey state that technology from consumer facing their processes are optimizing. This organizations, as the line between rises to 1 in 3 (32%) of US companies BPM and CRM becomes blurred. with more than 10,000 employees. As with other trends in BPM, US organizations will lead the way. US companies are relatively more likely to invest in BPM implementation in both good times and bad. When the 50% of US survey participants economy is buoyant, new paradigms indicated that interest in BPM within their organization would Venkat Bharadwaj, Head of drive interest in upgrading systems increase over the next year. Business Process Management, at forward thinking companies Capgemini, North America who want to extend competitive advantage. A good example is the 66% of US survey respondents emergence of social media. 60% of US indicated that harnessing the United States businesses anticipate that harnessing opportunities and managing the the opportunities and managing the threats of social media would The economic crisis of recent years, threats of social media will become be an important business driver triggered by crisis in the capital a more important business driver for for them over the next year. markets, had a widespread impact them over the next year – a greater across market sectors and regions proportion than in any other market. in the United States. However, Social media strategy can be effectively the most recent economic and standardised and structured using BPM financial indicators show that approaches and tools. Alternatively, recovery is underway. US business BPM affords companies the business continues to evolve and innovate, agility to react to difficult economic and the world’s biggest economy times. The recent downturn has caused remains the world leader in many many large organizations to refocus on important market verticals. ‘Lean’ principles – the legacy of this is that 65% of US companies anticipate The US is indisputably the world’s increasing investment in maximizing biggest market for BPM. Analysts cost-efficiency in the coming year. estimated that until 2010 North America accounted for more than half The US economy is very diverse, and of the global BPM market by revenue. there are several sectors in which The top 3 BPM software vendors, Pega, BPM adoption is prevalent. As in IBM and Oracle, are headquartered many other countries, financial in the United States. The research services has led the way in terms findings support the idea that the BPM of BPM adoption. US insurers have market is relatively mature. They also harnessed the power of BPM platforms demonstrate that in many areas interest to simplify claims processing and in BPM approaches will continue to enhance case management. In the develop. 1 in 2 USA survey participants aerospace and automotive sectors, indicated that interest in BPM within open BPM systems allows massive US their organization would increase companies to collaborate effectively over the next year, while 43% stated with their legions of suppliers. High- that their organization intended to tech companies working in heavily launch a BPM initiative in that period. regulated areas such as life sciences are attracted to BPM as it allows Process knowledge and process them to demonstrate easily their maturity are rather more developed compliance to new regulations. within large US organizations than elsewhere. An illustration of this is the In the next few years, there is likely to fact that a quarter of US organizations be a broader trend of interest in BPM

46 country. However, relatively tight Australian government, on the other regulation allowed Australia to survive hand is keen to put the dividend the worst ravages of the financial crisis, it has reaped from and Australian lawmakers believe that exports to good use, and has money their approach to risk management to invest in improving systems. is the best way to safeguard banks and other industries. Compliance is consequently a major consideration 53% of Australian companies for Australian companies. 51% of believe their organization will pay more attention to Scott Foster, Head of Business Process Australian companies believe that BPM over the next year. Management, Capgemini, Australia responding to regulatory changes will be very important for their business over the next 12 months. 47% of 51% of Australian companies respondents at Australian companies believe that responding to Australia anticipated that their organization regulatory changes will be very would increase investment in important for their business Australia has a dynamic economy, compliance over the next 12 months. over the next 12 months. which did not succumb to the This trend will be a key driver of global crisis of 2008. The country is interest in BPM. BPM allows customers currently benefiting from a resources to remain compliant to regulation boom, with mines working flat out and, crucially, to demonstrate this to meet Asian demand for a variety compliance automatically in a way that of commodities. The Australian does not significantly impact on costs. government will soon be running a budget surplus, and will be considering Australian manufacturing is the areas in which to invest to ensure struggling, due to the high value that the country remains in good of the dollar, while the cash-rich economic shape in the longer term. commodities sector has its own priorities and ways of working. Interest The level of process maturity at in BPM paradigms in Australia is Australian organizations is not as therefore led by the financial services advanced as at their US counterparts. sector and government agencies. 17% of Australian companies state that Australia is a regional financial services their process management includes hub and the sector is very mature. deliberate process optimization. Despite the robust national economy, Large Australian companies have Australian banks view economic events traditionally relied on outsourcing elsewhere in the world with trepidation business processes to Asia. However, due to the hyper-globalized nature of as the cost of BPO rises rapidly year finance. Significant recent job cuts at by year, Australian companies need Australian banks demonstrate that to step back and consider a different companies are paying attention to their approach to managing their processes. cost position and bank executives are This appears to be driving interest increasingly attracted to the potential in Business Process Management. benefits of process efficiency. More than half the respondents in the sample anticipate that their Banks want to drive out costs by organization will pay more attention standardizing back office functions to BPM over the next 12 months, and which have lots of duplication, 24% state that a lot more emphasis benefiting from reuse where will be placed on the approach. possible. 46% of respondents from Australian banks anticipate that Economic commentators have posited their organization will launch a that Australia is a heavily regulated BPM initiative in the next year. The

47 services sector is quite advanced. Both to concerns as to how the software banking and insurance businesses will fit into existing architecture. are prioritizing their ability to Companies with well-functioning remain compliant, and investing infrastructure are not necessarily ready in aspects of customer experience. for the step change that BPM implies. Both compliance and CRM can be enhanced by addressing them via a BPM solution. A third (36%) of 38% of German companies German participants in the research state that their processes are either ‘Managed’ or ‘Optimizing’. Matthias Jungkeit, Business expect that the level of interest in BPM This rises to 79% among Process Management Consultant, at their organization will increase German companies for whom Capgemini, Germany over the next 12 months. While this represents a significant increase in BPM is an important agenda interest, this figure is slightly lower item at managerial level. Germany than elsewhere, for example the English-speaking markets. This can 36% of German participants In recent years the German economy perhaps be explained by the balance in the research expect that has consistently outperformed the and health of the German economy. the level of interest in BPM at rest of the Eurozone. Recent events their organization will increase elsewhere in Europe have led to a The German exporting industries, the in the next 12 months. relative slowdown in the past few envy of much of the developed world, months, but Germany remains are in a strong enough position to without doubt one of the leading prioritize investing in driving revenue nations in industrialized production. over reviewing their internal processes. The continued success of German Interest in BPM from the state sector companies depends on their ability to in Germany is also relatively low at the introduce technological innovations moment, due in part to challenging at competitive cost levels. public sector procurement processes.

German industries have achieved In Germany, 45% of respondents stated success in part through harnessing the that they believed that BPM should latest methods of working, and German be treated as a C-level concern. This companies are under constant pressure is a lower figure than in, say, the US, to streamline services. However, just (65%) or Australia (69%). This may be 38% of German companies state that because BPM is still viewed too much their processes are either ‘Managed’ or as an IT item in Germany: only 11% ‘Optimizing’, the two most developed of German organizations stated that levels of the capability maturity senior business management takes model. The fact that this figure rises responsibility for improving processes. to 79% among German companies for Similarly, only 10% of respondents whom BPM is an important agenda indicated that they understand item at managerial level demonstrates BPM to be a “holistic management the inextricable link between BPM approach”. This is a lower proportion approaches and process maturity. than elsewhere and may ultimately undermine attempts to introduce More than a quarter (28%) of BPM, as while the major benefits of German participants in this survey BPM are delivered on the business indicated that they had both extensive side, the barriers are on the IT side. knowledge and practical experience of BPM techniques, which shows that Anecdotal evidence suggests that in BPM thinking is being adopted in Germany IT decision-makers can parts of the market. As in many other resist attempts to introduce BPM, due markets, interest from the financial

48 efficiency over the next year. Given responsibility for process optimization. the uncertain market conditions in If applied correctly BPM could deliver Italy, and likelihood of significant benefits by breaking down the barrier changes to the rigid regulatory that exists in a lot of Italian companies environment, large organizations between business and IT, creating in the country know that they need a more coherent flow across large to increase their business agility. organizations and driving efficiency. Nearly half (47%) of the Italian survey respondents anticipated increasing 47% of Italian companies Alessandro Czimeg, Head of Business investment in reacting to changes in believe that the level of interest Process Management, Capgemini, Italy market conditions, while a similar figure (46%) envisaged increasing in BPM in their organization will investment in responding to legislative increase over the next year. changes. BPM allows companies to Italy adapt rapidly and cost effectively to changes in the business environment. More than half of Italian Italy has faced well documented respondents indicated that economic challenge in recent times. During the research for this report, the perception of BPM as The country has been in financial there was anecdotal evidence of an IT item was a barrier trouble since 2008. These ongoing burgeoning interest in BPM in a to process improvement issues are a consequence of, among variety of market verticals in different within their organization. other factors, a lack of productivity parts of the country. In Northern and competitiveness in the Italian Italy, manufacturing companies are Only 14% indicated that work place and a rigid regulatory interested in potential applications Senior Business Management environment. Italy still has some of BPM with regard to automating takes primary responsibility world-class companies, and the and accelerating processes, and for for process optimization foundations of a strong export sector, increasing transparency of processes at their organization. but the country is increasingly trying and monitoring KPIs. In Milan, there to reform its working practices in order is growing interest among financial to achieve an economic resurgence. services companies around compliance and improving interactions with 19% of Italian survey respondents customers. Telecommunications indicated that the processes at their companies, often based in Rome, are organization are ‘Optimized’. The also increasingly interested in the figure rises to 23% at organizations benefits that can be delivered via BPM. with more than 10,000 employees. In contrast, interest in BPM in the These figures are slightly higher than public sector is relatively undeveloped, international averages that emerged due to budgetary constraints. from this research, but they still indicate that there is scope to drive One factor undermining the effective value and efficiency through process adoption of BPM thinking in Italy improvement. Almost half (47%) is the widespread perception of of Italian companies believe that BPM as an IT item. More than half the level of interest in BPM at their of Italian respondents agreed that organization will increase over the the perception of Business Process next year, which suggests that even in Management as an IT item was a a tough economic climate, far-sighted barrier to process improvement large organizations are willing to within their organization. Only 12% invest in innovations which will save of Italian decision-makers view BPM them money in the long term. Indeed, as a holistic management approach 59% of Italian survey respondents and in only 14% of organizations does indicated that they would be increasing Business Management take primary investment in maximizing cost-

49 Interest in BPM in France is growing: Major manufacturing companies, for 39% of organizations in the survey example in the world of aerospace, rely anticipated that the amount of interest on numerous collaborative workflows paid to Business Process Management in order to achieve the design of at their organization would increase high-tech products. Application within the next year. But the discipline of BPM software and thinking can is yet to gain widespread support and ensure that their workflows are sponsorship at managerial level within seamlessly joined up and that work French organizations, which hinders is automated and performance Alain Robbe, Executive Director, effective adoption. 11% of respondents measured wherever possible. Capgemini, France say that Business Process Management is currently an important agenda item at managerial level. This contrasts with Just 11% of French respondents the fact that two third of respondents state that Business Process France believe it should be treated as a C-level Management is currently concern. Many of the BPM projects an important agenda item During the early stages of the recent that French participants referred to at managerial level. economic downturn, the French had taken place within a business economy proved more resilient than area rather than cross-organization or 54% of French respondents many others, thanks in part to the cross-application. This stems from the stated that functional protection of European and French limitations of functional silo culture, silo culture is a barrier to regulations. However, as the crisis which makes it difficult to carry out BPM implementation at in the Eurozone has rumbled on, the far-reaching transformation projects. their organization. French economy has looked more More than half (54%) of French vulnerable. France has lost its top participants agreed that functional credit rating, and French firms are silo culture is a barrier to BPM facing a credit squeeze. The gap in implementation at their organization. industrial competitiveness between Recognition of this situation may France and Germany is growing wider. generate important opportunities There is pressure in the country for to help companies migrate to a an overhaul of corporate practices at process-centric organization. large organizations and receptiveness to new ways of running a company. The telecommunications sector is one area in which there has been The level of process maturity at some interest in BPM in the French French companies is relatively lower market. When it comes to fulfilment than elsewhere. Just 9% of French of complicated multi-channel participants in the survey indicated propositions BPM allows handling that their processes are optimizing. superior delivery of service and Strikingly 19% of French companies enhanced Customer Relationship with 10,000 or more employees stated Management. There is also a growing that their processes are ‘Chaotic’ interest in the benefits of BPM in (the least advanced category on the the public sector in France. BPM Capability Maturity Model), while can potentially facilitate efficiency just 7% of these companies stated that case management, through the their processes are ‘Optimizing’ (the digitalization of records, for example most advanced category). Nevertheless, with regard to private healthcare. French decision-makers are aware A further business trend which is of the importance of having clear driving interest in BPM in France is the business processes, and there is increasing trend towards businesses an opportunity to help them in the collaborating with other firms in conception, implementation and order to become more competitive. automation of their processes.

50 A further barrier to BPM 50% of Spanish survey implementation is the rejection of BPM respondents indicated that by IT departments. There is a sense staff who have responsibility that in Spain, business people grasp the for existing assets such as SAP value of BPM, but IT decision-makers or CRM systems are resistant are deterred by the pain involved in to process improvement. transforming current systems and training staff. IT are understandably protective of existing systems: one One in three Spanish decision- makers anticipates that the Jorge Villaverde, Financial Services in two participants stated that staff level of interest paid to BPM by Sector, Capgemini, Spain who have responsibility for existing assets such as SAP or CRM systems are their organization will increase resistant to process improvement. This over the next 12 months. illustrates how companies can react Spain defensively when faced with the threat 35% of Spanish businesses are of a difficult business environment. anticipating investing more in Having enjoyed an extended boom cost-efficiency over the next year. period in the decade up until the There is some interest in BPM global financial crisis, the Spanish adoption in Spain among companies economy has suffered recently as that are weathering the downturn a result of economic turbulence in more effectively. One in three (36%) the Eurozone. The country is in decision-makers anticipates that recession and the government recently the level of interest paid to BPM by announced the most austere budget in their organization will increase over the country’s history in an attempt to the next 12 months. 35% of Spanish bring down the level of public sector businesses are anticipating investing debt. Private sector firms in Spain face more in driving costs out of the a challenging business environment. business in the next year: BPM can allow organizations to drive cost out Only 14% of businesses in Spain state of the business in the medium term. that their processes management Companies that make a strategic includes deliberate process investment in new infrastructure now management and improvement. will be well placed to take advantage Knowledge of BPM in Spain is also of the upturn when it comes around. in its infancy. Only 12% of survey participants state that they both The greatest interest in Business know a lot about the subject and Process Management in Spain comes have plenty of practical experience from financial services companies. of it. A fundamental barrier to Banks are interested in ways in which BPM investment in Spain is that BPM can help eliminate cumbersome organizations are putting investment manual back office processes, for around new technologies and IT example requests to increase credit approaches on hold, as they cannot limits. Insurance companies are access capital. Companies must similarly interested in enhancing cut costs and make do with dated customer experience, for example by infrastructure. Almost half the facilitating multi-channel access. sample, (47%), state that they do not have the budget to optimize their processes. In the public sector, certain BPM implementations that had been considered have been put aside because of cash constraints.

51 BPM initiative over the next year. 35% of respondents in the Nordics indicated that they Interest in BPM thinking in the are anticipating an increased Nordics is being driven by the financial level of interest in BPM at their services sector and the public sector. organization over the next year. In countries such as Norway and Sweden, as opposed to Spain and Italy the government has money to invest 38% of decision-makers in expansive infrastructure projects. anticipate that they will launch a BPM initiative over the next year. Jonas Schlyter, Head of There are lots of initiatives afoot at Business Process Management, a local government level in Sweden for improving citizen-centricity and Capgemini, Nordic Region 62% of Nordic decision- delivering citizens the kind of 24-hour, makers state that BPM should multi-channel access to services that be a C-Level concern. Nordic Region they receive in the service sector. These can be delivered by BPM solutions. The Nordic countries have fared better BPM also allows municipalities than their European neighbours during to streamline service provision, the economic crisis. Norway has used eliminating manual work and the “From the point of view of a its oil fund to stimulate various sectors, duplication of effort. In the financial local government agency, while Sweden’s state provided services sector, business priorities eGovernment solutions are solid protection. Banks in the region such as cost-cutting and adhering an important tool for driving are well capitalized and public sector to regulatory change in an efficient both citizen satisfaction debt is low by European standards. fashion are driving interest in BPM. and cost reduction.”

13% of Nordic participants in the Many Nordic decision-makers CIO, Municipality, Sweden survey stated that process management that participated in the survey at their organization includes acknowledged that C-level engagement “The COO and CIO need to deliberate process improvement, is central to the success of a BPM manage ways of working, and although the figure rises to 19% implementation. 62% stated that to identify what performance among enterprise level organizations. BPM should be a C-level concern information is needed, which A quarter of Nordic decision-makers compared to just 8% who do not is why they should involve (24%) state that BPM is an important think it should be. This suggests themselves in BPM.” agenda item at managerial level within that Nordic organizations may have their organization, which is a greater the senior level impetus required to Information Manager, proportion than in the UK (20%) but implement BPM over the coming years. Financial Services slightly less than in the USA (29%). However, just 9% of participants state One potential barrier to process that they know a lot about BPM and improvement in the Nordics is the have plenty of practical experience of gap between business and IT. It the approach, which is considerably can potentially be difficult to get less than in markets such as Germany Business and IT on the same page. (28%) and the USA (32%). IT departments are more likely to be sceptical about the value of BPM. While the Nordic countries are not 48% of Nordic decision-makers early adopters of Business Process agree that resistance from IT staff Management paradigms, they who have responsibility for existing may well be quick learners. 35% systems such as SAP and CRM can be of businesses are anticipating an a barrier to process improvement. increased level of interest in BPM at their organization over the next year, while 38% of decision-makers anticipate that they will launch a

52 mature markets like Spain (12%). identify facilitating customer self- This shows that BPM paradigms have service as an important business driver, begun to gain traction in many sectors. while 57% believe that it is important There are, however, some barriers to to increase the number of channels BPM adoption, which stem from the through which customers can interact tradition of investment in process with the business. A BPM framework at Dutch companies. Many of the can help by addressing the information investments have been in functional silos around the different channels. applications for just one part of the Roger de Ruiter, Head of process, and not having an end-to- 52% of Dutch participants who Business Process Management, end focus. This is exemplified by the are considering launching a Capgemini, The Netherlands research which shows that 46% of the Dutch decision-makers surveyed process improvement initiative identify function silo culture as a believe it could have greatest Netherlands barrier to process improvement. impact in terms of harmonizing We have seen that many Dutch business processes. The Netherlands is recognized as businesses have invested heavily in being a mature market in terms of their existing systems. This can often One in six Dutch survey BPM adoption. Dutch businesses lead to decision-makers requiring respondents states that they have traditionally been leaders in convincing of how BPM can extend have extensive knowledge and embracing innovative technology their existing investment leading to practical experience of BPM. and have therefore implemented increased flexibility and agility. generations of applications throughout the 1990s and 2000s. There is a long- As in other markets, the Dutch Roger de Ruiter, Capgemini established tradition of harnessing financial sector is taking the lead in BPM Head in the Netherlands technology to support processes. This terms of adoption of BPM thinking summarized the benefits of tradition presents both interesting and software. Interest in BPM in the using BPM to cut through the opportunities and barriers regarding public sector is also growing rapidly in clutter of existing application the adoption of BPM paradigms. the Netherlands. There is interesting landscapes in the following way: scope for application of BPM paradigms Large Dutch organizations have in fields as diverse as police, public “With BPM there is no longer typically extended their applications healthcare provision and customs. a difference between IT & in a piecemeal fashion over time as Capgemini BPM experts have observed Business; it’s your Business, and technology has evolved, extending and how pressure on budgets in the your customers will notice it.” building on core applications which Public sector has driven an interest in ultimately means that companies will efficiency and reorganization of work. have complex application landscapes. Challenging market conditions in the In the Netherlands, more than half Netherlands are driving further interest the people who are considering in BPM. 70% of survey participants introducing a BPM initiative state stated that a business environment in that the principal benefit will be to their sector that was more challenging harmonize business processes. A than expected would prompt them to BPM layer allows organizations to increase the amount of consideration achieve centralization of common they give to process improvement. processes while allowing a level of flexibility where desirable. Capgemini experts observe that the convergence of BPM, ECM and One in six Dutch survey respondents CRM technology is more advanced states that they have extensive in the Netherlands than elsewhere. knowledge and practical experience Customer-facing organizations are of BPM. This is a similar figure to the increasingly redesigning their front UK (16%) and rather more than less office and CRM functions, in a BPM tool. 60% of Dutch organizations

53 Acknowledgements

We would like to acknowledge the team of collaborators who were instrumental in creating this report:

Initial thanks go to the Netherlands team led by Roeland Loggen, who created the Netherlands survey in 2010, and whose thinking we leveraged.

For , analysis and report content: James Cope and James Bakewell at FreshMinds, and the team at Capgemini: Nicholas Kitson, Tim Arkin;

Sector leads: Brian Girouard, Ard- Jan Vethman, Nico Kaptein, Jean- Marc Steffann, Nicholas Kitson.

Country leads: Jonas Schlyter, Matthias Jungkeit, Scott Foster, Roger de Ruiter, Venkat Bharadwaj, Lee Beardmore, Alessandro Czimeg, Jorge Villaverde, Alain Robbe.

For marketing and communications: Nikki Gordon Jones, Hester Decouz.

For executive sponsorship: Bob Scott

We would like to thank all the panel and interview participants for their time and willingness to share openly their challenges around BPM

© 2012 Capgemini. All Rights Reserved. Rightshore® is a trademark belonging to Capgemini. No part of this document may be modified, deleted or expanded by any process or means without prior written permission from Capgemini.

54 About Capgemini

With around 120,000 people in 40 countries, Capgemini is one of the world’s foremost providers of consulting, technology and outsourcing services. The Group reported 2011 global revenues of EUR 9.7 billion. Together with its clients, Capgemini creates and delivers business and technology solutions that fit their needs and drive the results they want. A deeply multicultural organization, Capgemini has developed its own way of working, the Collaborative Business Experience™, and draws on Right- shore®, its worldwide delivery model.

Rightshore® is a trademark belonging to Capgemini

For more information, please contact:

Bob Scott: BPM Global Service Line Leader [email protected] Nikki Gordon Jones: BPM Marketing Manager [email protected] Hester Decouz: Press Office [email protected] www.capgemini.com/globalbpmreport