Process Improvement

The
Transparent Bank:
The Strategic Benefits of BPM
Banks are taking business process management beyond simple workflow
automation to actually measure and optimize processes ranging from online
account opening to compliance.

I
By Nancy Feig F ANYONE KNOWS ABOUT THE BENEFITS of business
process management (BPM), it’s Steven Liles,
manager of integration services at Winston-Salem,
N.C.-based BB&T Corp. In October 2006, BB&T went
live with a BPM-powered online account opening
process. The results speak for themselves.
Before the implementation, it took as long as
two weeks to open a customer account online,
according to Liles. The process now can be com-
pleted in mere minutes, he says. Before, the bank
had 20 full-time employees in place to support the
online account opening process, Liles adds. Now
it needs just three. Meanwhile, the number of
accounts opened online has risen steadily, to more
than 100,000 in 2007.
But that’s just the tip of the BPM iceberg. Like
many banks around the world, BB&T is turning
to BPM as a means to achieve a more transpar-
ent and disciplined organizational model.
BPM enables banks to link their IT systems
into their processes, allowing them to automate,
streamline and monitor key processes, such as
account opening, compliance and payments. The
impact that a successful BPM implementation can
have — on everything from application develop-
ment to customer service to channel performance
— can be astounding. According to an August 2007
report from Forrester Research (Cambridge, Mass.),
the market for BPM software is projected to grow

www.banktech.com | JUNE 2008 | BANK SYSTEMS & TECHNOLOGY 31

from $1.6 billion in 2006 to $6.3 billion by 2011.
One of the greatest promises of BPM is transparency
into processes. Transparency, in terms of BPM, is the abil-
ity to view all the steps in a process and where a certain
transaction or case resides in the flow of that process.
According to Liles, he has been able to make several
improvements to BB&T’s ($136.4 billion in assets) online
account opening process based on reporting from Cam-
bridge, Mass.-based Pegasystems’ SmartBPM Suite. In
BB&T’s online account opening system, every customer is
treated as a separate case, he relates. The Pegasystems
BPM solution is able to produce reports on individual cases,
as well as larger trends and patterns, Liles notes.
The SmartBPM Suite includes dashboards available to
analysts in the bank’s online channels that allow them to
spot patterns in customer behavior, Liles explains, adding
that employees in the bank’s call center have access to cus-
tomized dashboards to handle exceptions in the process.
The ability to see exactly where and when in the process
customers drop out, he continues, has allowed BB&T to
make improvements to the process quickly.
“We routinely look at bottlenecks,” Liles says. “Early on,
“What Do You See as the Primary Benefit of
BPM Efforts?”
Increased productivity for
process workers
The ability to provide real-time
visibility into key processes
The ability to change processes
quickly and easily
The ability to model
business processes
Consistent process execution across
business units or geographies
Optimization of processes
Decreased reliance on IT for supporting
and changing processes 4%
The ability to test work for compliance
and remediate problems 1%
0 5%
Base: 142 IT architects
(Percentage may not total 100 percent because of rounding.)
Source: Forrester Research, October 2007 U.S. and U.K. Enterprise Architecture and Business Process Management Online Survey
people would drop out at the funding stage.”
Liles notes that the SmartBPM Suite’s case manage-
ment system also allows for greater channel integration.
“BB&T’s branch channel is now using the same BPM back-
bone,” creating more-seamless visibility into customers’
interactions with the bank across channels, he relates.
That type of end-to-end process visibility brings IT and
the business closer together, according to Kiran Garimel-
la, VP for BPM solutions at Darmstadt, Germany-based
Software AG. “You see process in a very live sense,” says
32 BANK SYSTEMS & TECHNOLOGY | JUNE 2008 | www.banktech.com
Garimella, who has written several books on BPM.
In addition to process improvement, BPM also can help
financial institutions streamline regulatory compliance.
Because BPM solutions automate processes based on com-
plex rules engines, compliance functions can be easily inte-
grated into the workflows. Vendors even are building com-
pliance frameworks into their BPM suites.
Supporting Fraud Investigations
Atlanta-based SunTrust Bank ($175.1 billion in assets)
plans to use Pegasystems’ SmartBPM solution to help pre-
vent money laundering, support fraud investigations, and
manage compliance with the Bank Secrecy Act, USA Patri-
ot Act and other regulations. According to Kevin A. Poe,
the bank’s SVP of enterprise business process services,
SunTrust’s goal is to simplify compliance by consolidating
its multiple systems for suspicious activity reports (SARs).
SunTrust’s newly optimized fraud investigation process
will be rolled out in several iterations, Poe relates. The proj-
ect, which will be released in four phases beginning this
September and ending in the third quarter of 2009, will
span seven business units, he says, explaining that the abil-
ity to use the SmartBPM Suite to collabo-
rate across multiples lines of business and
disparate application areas was a major
reason for its selection.
24%
In fact, SunTrust already is using the
18% Pegasystems BPM suite in another area of
the bank, Poe reports. Like BB&T, SunTrust
15%
first targeted online account opening for
13% process improvement, rolling out an enhanced
12% sales application March 12, 2008.
“The idea was first [to address] genera-
12% tion of account opening through the online
channel,” recalls Christian Caspersen, VP,
business process lead, for SunTrust. “The
goals were a 15-minute interaction and every-
10% 15% 20% 25%
thing done on a real-time basis.”
According to Caspersen, “We’ve seen great
results.” Even though the bank is not yet
marketing the service, it has seen “three or four times the
volume” compared to the numbers prior to the BPM imple-
mentation, he says. A large reason for this, Caspersen sug-
gests, is that online account-opening customers are not drop-
ping out of the process nearly as often. As a result, “The online
channel is opening more accounts than any branch,” he adds.
This ability to reuse the BPM suite throughout the bank
sets Pegasystems’ solution apart from other tools that the
bank has used, notes SunTrust SVP Donald Marks. “We’re
looking to leverage the processes and lessons” learned from

the initial deployment of the SmartBPM Suite, he says, cred-
iting the vendor with helping SunTrust plan future deploy-
ments. “They talked about alternative tracks and the best
way to deploy the tool” across the enterprise, Marks relates.
Pegasystems also facilitated discussions between Sun-
Trust and peer banks via user groups, notes Trace Fooshee,
a process consultant at SunTrust. In these user groups,
banks offered advice on how to best structure a BPM deploy-
ment, he explains. “Peers have a lot of experience with opti-
mal reusability,” Fooshee says.
Application Development: Go Speed Racer
That reusability extends beyond the BPM application itself
to the processes that it optimizes. Similar to a service-
oriented architecture (SOA), BPM speeds application
development through process reuse and improves an orga-
nization’s overall agility.
Pointing to the philosophical similarities and synergies
between SOA and BPM, BB&T’s Liles advises other banks to
“try to coordinate BPM activities with SOA activities.” “This
was very powerful for us and led to real automation,” he says,
adding that BB&T has reused BPM-optimized processes for
several initiatives. “We’ve already used it for several other
projects: fraud management workflow, mar-
keting lead lifecycle management and payroll
services onboarding,” Liles relates.
As with SOA, the rapid pace of change
in the industry is a major driver of banks’
BPM implementations, says Stessa Cohen,
research director at Gartner (Stamford,
Conn.). “One of the key benefits [of BPM] is
around agility,” she adds, defining agility as
“the ability of an organization to sense change and adapt
to it efficiently and effectively.”
By enabling the reuse of processes, BPM helps banks adapt
to whatever the marketplace requires — new channels, new
devices, new products — in the shortest amount of time,
Cohen continues. “Are you going to re-create the wheel every
time [you need to adjust or create a process]?” she asks.
Gene Rawls, VP of continuous development, information
services, for Wells Fargo Financial (Des Moines, Iowa) — a
unit of San Francisco-based Wells Fargo & Co. ($575 billion
in assets) that provides real estate-secured lending, auto
financing, consumer and private-label credit cards, and com-
mercial services to consumers and businesses — says the
bank’s businesses initially didn’t believe how quickly appli-
cations could be built leveraging Austin, Texas-based Lom-
bardi’s Teamworks BPM solution. Rawls relates a time when
a stunned line-of-business manager turned to him and said,
“I didn’t think you’d be back so soon,” when Rawls delivered
www.banktech.com | JUNE 2008 | BANK SYSTEMS & TECHNOLOGY
Process Improvement
Wells Fargo Financial’s ($73 billion in assets) first BPM-
powered implementation in early 2007.
According to Rawls, there were numerous benefits of that
first deployment — which involved automating dealer setup
— starting with an automated workflow. Now dealer applica-
tions are routed automatically from person to person, rather
than requiring the pushing of paper files. Rawls says the stream-
lined workflow has led to increased employee productivity.
“Another benefit is the tracking of work,” Rawls adds. Prior
to automating and defining the process of dealer setup, a
dealer would call to check on the status of his or her appli-
cation, and a Wells Fargo representative would have to phys-
ically find on whomever’s desk the application was sitting at
the time, without knowing where to start looking, he explains.
“Now there is visibility,” Rawls says. Bank employees
can just log in and check at which point in the process the
dealer’s application resides. “It helps the relationship with
the dealer and with staffing,” he notes.
Application turnaround for dealers used to take an aver-
age of seven to 10 days, Rawls continues. With the Lom-
bardi BPM solution, it’s down to two to three days, with a
one-day turnaround possible if the dealer enters all of his
or her information up front, he says.
“Try to coordinate BPM
activities with SOA
activities. ...This was very
powerful for us and led to
real automation,” says
Steven Liles, BB&T.
Further, managers used to spend hours every month
generating reports from spreadsheets, Rawls points out.
Now the BPM system automatically generates reports for
them, collectively saving them an average of 100 hours
every month, he asserts.
Then there’s the cost savings. While Rawls doesn’t have
any hard ROI numbers, he says the bank saved $750,000
in 2007 from two new BPM implementations that were
rolled out in the middle of last year.
Noting that Wells Fargo Financial currently has nine
BPM deployments in production and another four projects
in the works, Rawls stresses that not having to reinvent
the wheel saves him months of development work for each
of his deployments. Project turnaround time from the ini-
tial go-ahead for a BPM project to its actual deployment,
he says, is just three months.
Despite such impressive results, adopting BPM and a
process-centric ideology is not an automatic ticket to suc-
33
Process Improvement
cess. There are several important best practices and chal-
lenges associated with any BPM project, according to experts.
“One challenge is making sure you understand your
processes going into this,” says Laura Mooney, senior direc-
tor of corporate communications at Metastorm. Baltimore-
based Metastorm offers BPM software as well as software
for enterprise architecture and business process analysis.
Mooney advises banks to define the scope of their BPM
implementation up front, develop a business case and design
an implementation with regular milestones.
“An enterprise strategy with local projects is the key to
[a BPM] implementation,” adds Gartner’s Cohen. “It can
be a challenge, but breaking it down into small pieces is a
way to make it manageable,” she says.
Software AG’s Garimella warns banks to keep
their expectations in check. “We always advise
people that BPM is not a way to try to get rid of
your assets right away — it’s not a rip and replace,”
he says. In addition, Garimella cautions, “Don’t
get bogged down in enterprise process modeling
initiatives. … Don’t map processes just for the
sake of mapping.”
And, as with any major organizational change, there may
be some resistance from longtime staff. For example, soft-
ware developers may resist BPM initiatives because the
process reuse removes much of the back-end coding from
the application development process, says BB&T’s Liles.
A BPM Center of Excellence
One of the best ways to ensure the success of BPM initia-
tives, experts agree, is to establish a BPM center of excel-
lence to leverage investments in BPM technology. A BPM
center of excellence, however, goes beyond the typical proj-
ect management office (PMO).
SunTrust’s Marks reports that the bank’s PMO is not
currently set up to deal with the BPM model of deploy-
ment, which is “iterative and agile,” he says. To keep the
project moving forward, Marks notes, he and his team, with
support from CIO Tim Sullivan, had to educate the PMO
on the basics of BPM deployments. “It helps that we had
success from our first implementation,” Marks says, adding
that the bank currently is creating a specific BPM project
management track.
According to Metastorm’s Mooney, BPM centers of excel-
lence are prevalent among large organizations, which tend to
have more BPM initiatives in
place than do smaller organiza- banktech.com
tions. She estimates that about
BPM MOVES BEYOND WORKFLOW business optimization:
10 percent to 20 percent of all
banktech.com/showArticle.jhtml?articleID=200900163
organizations have created BPM
34 BANK SYSTEMS & TECHNOLOGY | JUNE 2008 | www.banktech.com
centers of excellence, noting that the formation of BPM cen-
ters of excellence is driven by companies’ desire to make sure
there is a strong business case in place for BPM initiatives.
Those organizations that have established BPM centers
of excellence experience greater success with their BPM ini-
tiatives, Forrester reports. According to the research firm’s
February BPM study, almost half of all organizations that
reported “clear and measurable benefits from their BPM
efforts” had established a BPM center of excellence. In con-
trast, only 4 percent of those reporting “no BPM success” had
a center of excellence in place. Forrester defines a center of
excellence as “a formally appointed and documented body of
knowledge and experience on a particular subject area with
“An enterprise strategy
with local projects is
the key to [a BPM]
implementation,” says
Stessa Cohen, Gartner.
the goals of providing expertise, managing governance prac-
tices and supporting projects associated with the subject area.”
According to BB&T’s Liles, the bank has a small BPM
center of excellence, but it’s “not formal right now.” All the
members of the group, he says, are from the IT organiza-
tion’s integration services group. They typically evaluate
projects at the initial stages, Liles explains.
Likewise, SunTrust’s BPM center of excellence consists
purely of IT staff, the bank’s Marks says.
But, Forrester stresses, a BPM center of excellence should
include representatives from the business as well as IT.
The group also should include a process visionary, a BPM
project manager, a BPM tool expert, domain project experts
and an enterprise architect, Forrester says.
The result of all this governance is sustainable, long-
term BPM success. Metastorm’s Mooney notes that the core
of BPM has shifted from a workflow focus to a focus on ana-
lytics and corporate governance. “There’s more emphasis
now on putting metrics in place and drilling out reporting,”
she explains.
BPM delivers the ability to measure results in detail, adds
Gartner’s Cohen. The real benefits of BPM, she says, include
results that banks can benchmark and then tie to ROI. This
allows banks to quickly build business cases for future proj-
ects, which tend to be shorter
and more measurable.
“Success feeds additional suc-
cesses,” Metastorm’s Mooney
says. “It’s a snowball effect.” ❑