A Business Process-Centric Approach To Financial Transactions
- 1. A Business Process–Centric Approach to Financial Transactions IDC - Financial Services, Lisbon 14 th March 2007 Miguel Ferreira HP Consulting & Integration
- 2. Summary Challenges in the Banking Industry Solution Business Process-Centric View HP.BizProc Framework HP Financial FrontOffice Compliance via Business Processes Document Management an example in the banking sector Key Take Aways Q&A June 7, 2009
- 3. banking in challenges »» Describing the challenge ««
- 4. 2005 Main Challenges in Banking Customer Related Business Processes Produts Customer Retention 80% Getting new Customers 76% Cost Reduction 72% Development of New Products 70% Development of New Services 57% Compliance 52% CRM 46% Increase the Customer Wallet 43% Optimizing Channels 30% Multi-Channel Integration 30% Platform Migration 13% Privacy and Fraud 13% Management Reporting 9%
- 5. Value Chain Focus Areas Customer Experience Cross Selling Distribution Channels Development of New Products and Services Processes Reporting and Management Develop client profiles – understand client needs Loyalty-based management Individual service concepts for different client categories Multi-channel - strong integration of all existing and potential distribution channels Co-operations (supermarkets, car dealers, insurance companies, etc.) Product packaging Reduce time to market - high flexibility in the configuration of products (parameterization) Clear separation of front- and back-office Shifting of front-office activities to 70% sales and 30% administration Straight-through processing - fully automated processes Profitability calculation per customer Unit costs calculation per product Integration of risk measures into financial performance calc.
- 6. Impact in the IT Ecosystem Information Systems Infrastructure Service Oriented Architecture and Centralized Architecture Multi-channel capabilities supported by standard middleware products supporting real-time information on each distribution channel Architecture using standard frameworks (J2EE, .NET, …) to support component based applications and easy integration of third party products Web centered architecture (Thin-client architecture, Web services) Straight Through Processing for cross-system automation of internal and external transactions supported by standard message formats (XML, SWIFT) together with standard communication protocols (HTTP(S), SOAP, TCP/IP) 24x7 availability supported by disaster recovery concepts and two data centers Identity infrastructures based on directory, authentication, single-sign-on and management utilities using standards like LDAP are emerging as a pre-requisite for adaptive infrastructure Server consolidation with few servers and platforms with a scaleable, available and manageable infrastructure
- 7. June 7, 2009 vision C ENTRIC business process »» Paradigm Shift – From Transactions To Processes ««
- 8. The Evolution Of Business Heterogeneity and Change have driven organizations to shift from highly hierarchical organizations, where business divisions were vertical, isolated and segmented into departments, into a more horizontal business process centric layout, toward the new business ecosystem paradigm where the dividing borders of departments became blurred June 7, 2009 Vertical 80’s and before Horizontal 90’s Ecosystem The New World
- 9. The Evolution of Systems Architectures But if this is what has been happening to organizations, where does that leave the corporate IT environment? Business processes no longer pay respect to the sacred, yet invisible, line separating business units as they all must now cooperate on a mesh of interactions and players. The mesh itself keeps getting redefined according to the business requirements’ wishes. This lead to an evolution at the systems architectures level since new systems must still coexist with elder systems as organizations cannot get rid of core business systems at the same rate they become legacy. June 7, 2009 Monoliths Structured Client/Server 3-Tier N-Tier Distributed Objects Components Services
- 10. Classical Financial Transaction Money Transfer
- 11. Machine-Centric >> People-Centric The biggest return on investment for the business lays under the waterline Processes is the single pillar that can be used to interoperate all the remaining ITIL-based approach 20% 80% People Roles and Responsibilities People Management Skills Management Processes Design and Modeling Compliance Continuous Improvement Policies Automation Standardization Governance Templates Technology Tools & Infrastructure
- 12. Reality Check – The Human Factor Can you ‘rollback’ a human decision? Can you ‘rollback’ a user viewing business data? Can you ‘rollback’ a printer? Can you enforce compliance on a human? Hence: Transactions require all participants to be transactional ‘ undo’ is not ‘rollback’ Humans are non-transactional If the human factor is included in the business model, then almost certainly it is not a transaction but a human workflow Cash & Checks Deposit user activities
- 13. Transaction-Oriented >> Process-Oriented June 7, 2009
- 14. Human-to-Human – Routing Collaborative Human-Enabled BPM Enterprise Application Integration Human-to-Human – Workflow Human-to-Application – Processing Application-to-Application Integration “ the Microsoft Business Process Management (BPM) Solution” Processes Ecosystem Office, Exchange, SharePoint BizTalk
- 16. Background Mid-sized bank in Portugal with 600 branches and around 1300 users The initial scope for the RFP was ‘a teller application’ The Business Processes gospel was preached and the scope was broadened to a Business Process project that could also manage financial transactions Since it is now a Business Processes-centric solution based on a framework approach rather than using a financial package, new non-financial processes can be easily introduced, e.g. credit applications
- 17. Functional Modules Integrated Frontoffice Human Workflow Multi-Channel Ext. Apps CRM Simulators R E P O R T I N G A U D I T I N G & BPM & Teller Intranet Portal
- 18. Main Technical Modules R E P O R T I N G A U D I T I N G & Human Workflow Multi-Channel Ext. Apps CRM Simulators BPM & Teller Intranet Portal
- 19. Physical Architecture Headquarters Backend Branch AD Users Active Directory Olivetti PR2 Multi-Channel Other Local Device SPS Web-Enabled Workstation WSS SQL Server K2.Net
- 20. The Organizational Structure Represented on the Corporate Active Directory
- 21. Cash & Checks Deposit The User Interface
- 22. Synchronous Navigation on a Workflow Cash & Checks Deposit Workflows are assynchronous in nature In some cases, although the process may have several steps, you want to guide the user to the next inline activity Thanks to the HP.BizProc framework, it is possible to provide a synchronous user experience The UI waits for the business process to reach the next user-enabled activity and then redirects the user to UI of that step user activities
- 23. Workplace Detailed Layout Portal environment in SPS and WSS Cockpit-type workplace Functional areas and contents are targeted to the user’s profile Integration of heterogeneous applications, i n-process and o ut-of-process Collaboration Easy to use SOA and Business Process-Oriented Worker Info Process Explorer Workspace History of the Process Financial Devices Customer Search CRM Pending Processes (To Do) News Area Simulator E-Mail & Collaboration Accounting Data Online Reporting Spreadsheet
- 24. Out-of-Process Integration Thanks to MiniBrowser it is possible to integrate multiple applications This integration is defined as being out-of-process, e.g. it is not part of the business process definition Different applications may this way react to a context If unavailable, the notified applications will not prevent the execution of the main business process June 7, 2009
- 26. What It Is A framework with components divided into three tiers, that span from programmatic interfaces, to user interaction components It is more than Business Processes alone as it encompasses EDRM as well Uses MS Sharepoint 2007 and K2.Net 2003 Meant for streamlining the SOA paradigm by promoting a business process-centric vision centered on the human-to-human and human-to-machine interaction June 7, 2009
- 27. Functional Model June 7, 2009 3 rd Parties External Apps. External Apps. Banking Comp. Gov. Comp. Industry Comp.
- 28. Facets of the Framework June 7, 2009
- 29. Separation of Roles There is a clear division between process modeling and GUI development Business Analysts take care of the first, whereas Developers of the second June 7, 2009
- 30. Development Cycle June 7, 2009
- 31. VS 2005 Rapid GUI Development Pack The ProcessBinder tool item contains all the logic for binding a form to any business process This contextualizes the development so that all the controls dragged onto the form will automatically inherit the context of the process At designtime, the form easens the pain of interfacing with the process server by means of a wizard At runtime, it exposes a set of server events and the data dictionary of the processes for easy manipulation Thanks to a rich set of behaviours, it is possible to give a synchronous experience to the end user in a way that the form will jump to the subsequent forms modelled on the processes as it progresses
- 32. Document Management processes business »» compliance and handling ««
- 33. Document Management in Business Processes Documents are just another information asset when it comes to the management part in “Document Management” June 7, 2009 Documents are often the functional trigger for a business process, e.g. credit application Business Processes tend to interact with transactional systems, such as line of business applications Not surprisingly, documents are often the end result of a business process, e.g. an credit application
- 34. therefore … Be Suspicious when SOMEONE mentions DOCUMENT MANAGEMENT June 7, 2009 High risk of non-compliance No holistic view of customer Slow, inefficient and expensive Paper transactions are 24X more expensive to process Slow response to customers Managing volume and variety 95% of business decisions are based on a document
- 35. he may be very well Crying Out for BUSINESS PROCESSES that can also manage docs June 7, 2009 Authoring & Acquisition Archiving Human Worflow Other data, e. g., B iometric D ata S canning of D ocuments Content Management Documents Photos, Signatures, … Forms
- 36. HP Integrated Solution Integrated Technical View June 7, 2009 Structured and Unstructed Documents Acquisition Transformation, Handling & Routing Blue Prints & Photos Fax Mail Shipping Documents Invoices Contracts Applications Reports Scan in documents with HP mfp's and scanners Indexing & categorizing at the mfp front panel OCR/ICR Data Correction Data Extraction Data Validation Encryption/ Decryption Files Forms Recognition and Management Zone Recognition Notification Options Barcode Recognition Image Enhancement and Management File Options File Conversion Vignette OpenText Filenet SAP RISS Interwoven Stellent Oracle Business Process (Human Workflow) Deliver to Content Management FSE
- 37. Distributed Scanning Financial Front-Office – New Account June 7, 2009 Paper Form
- 38. Distributed Scanning Financial Front-Office – New Account June 7, 2009 Shared Device
- 39. Distributed Scanning Financial Front-Office – New Account June 7, 2009
- 40. Distributed Scanning Financial Front-Office – New Account June 7, 2009
- 41. Distributed Scanning Financial Front-Office – New Account June 7, 2009
- 42. Distributed Scanning Financial Front-Office – New Account June 7, 2009 Archiving & Storage
- 43. Local in-Form Scanning of Documents Documents are then handed to K2 In this new paradigm, documents are now gathered as part of a normal process kick-off procedure Using any TWAIN compliant local scanner, users build on-the-fly documents by adding individual pages Individual pages are then handed over to K2 that converts them into multiple PDF documents using the HP.BizProc framework As part of the K2 business process flow, documents are handed over to Sharepoint as records This way, handling binaries becomes as easy as filing a textbox, without any custom coding All that without ever leaving the form!!
- 44. aways take key
- 45. Key Take Aways ‘ Transactions’ is to Newton as ‘Business Processes’ is to Einstein. Newton’s law is a subset of Einstein’s relativity theory, only valid when the velocity is far from light speed Likewise, ‘Transactions’ stand on the lower end of the ‘Value-Chain’ offering a technology-centric simplistic solution to a business problem. As you move up the ‘Value-Chain’ toward a holistic approach, then you enter the ‘Business Processes’ realm. The ‘Value’ in ‘Value-Chain’ implies the need for people In order to meet the customer’s requirements it is necessary to see past beyond the customer’s self-diagnostic and pinpoint the cause of the pain, always using a holistic approach centered around ‘Technology’ , ‘People’ and ‘Processes’ ‘ People’ are the ultimate reason for any information system to exist, so make sure you place them where they belong, the pedestal
- 46. Key Take Aways Human Business Processes Human Workflow Identify the gaps in ‘Technology’ , ‘People’ and ‘Processes’ and then use the right tools. Clearly identify the functional modules on your solution in terms of ‘EAI’ , ‘Collaboration’ and ‘Human Workflow’
- 48. hp
Editor's Notes
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