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EXCELLENCE IN PRACTICE VOLUME II
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Workflow Handbook 2001

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This introductory chapter was excerpted from Excellence in Practice: Innovation and Excellence in Workflow and Imaging©.
©.Copyright protected: No part of this chapter may be reproduced in any form or medium without written permission of the publisher.

Moving the Competitive Goalposts:
Seven Ways to Achieve Excellence ©

Connie Moore, Vice President, Giga Information Group

The competitive playing field for workflow and imaging continues to change as visionary companies push the envelope for innovation and excellence. Companies excelling in document imaging and workflow share common characteristics that other organizations are well advised to learn. Companies competing head-to-head against such visionaries must shift their IT and business strategies to keep pace. Ways to move the competitive goalposts when implementing imaging and workflow technology include focusing on enterprise-wide solutions while also reaching the extended enterprise, and empowering users to develop, modify, and enhance flexible, workflow-enabled processes.

Insights on Excellence

WfMC, Giga Information Group and WARIA annually recognizes organizations that have demonstrably excelled in implementing innovative document and workflow solutions to meet strategic business objectives. The prestigious Excellence in Workflow Awards, now in their eighth year and competed on a worldwide basis, are highly coveted by organizations that seek recognition for their achievements. These awards not only provide a spotlight for companies that truly deserve recognition, but also provide tremendous insights for organizations wishing to emulate the winners' successes. There is no better way to achieve excellence than to learn from others' mistakes and successes.

To be recognized as winners, companies must address three critical areas: excellence in innovation, excellence in implementation and excellence in strategic impact to the organization.

bulletInnovation encompasses the innovative use of technology for strategic business objectives; the complexity of the underlying business process and IT architecture; the creative and successful deployment of advanced workflow and imaging concepts; and process innovations through business process reengineering and/or continuous improvements.
bulletHallmarks of a successful implementation include extensive user and line management involvement in the project while successfully managing change during the implementation process. Factors impacting the level of difficulty in achieving a successful implementation include the system complexity; integration with other advanced technologies; and the scope and scale of the implementation (e.g. size, geography, inter-company processes).
bulletImpact is the bottom line, answering the question "what benefits does imaging and workflow deliver to the business?" Examples of potential benefits include: productivity improvements; cost savings; increased revenues; product enhancements; improved customer service; improved quality; strategic impact to the organization's mission; enabling culture change; and-most importantly-changing the company's competitive position in the market. The visionary focus is now toward strategic benefits, in contrast to marginal cost savings and productivity enhancements.

While successes in these categories are prerequisites for winning the Excellence in Workflow Awards, it would reward all companies to focus on excelling in innovation, implementation and impact when installing imaging and workflow technologies. Without doing so, they will not achieve the full potential document imaging and workflow offer. Companies must recognize that implementing innovative technology is useless unless the organization has a successful implementation approach that delivers-and even surpasses-the anticipated benefits. True visionaries are not content with merely achieving benefits; they are proactively driven to raise the standard for excellence in their industry-in essence, moving the competitive goalposts.

The Seven Ways to Achieve Excellence

We at Giga Information Group are quite fortunate to have read all the submissions for the excellence awards-not just the Gold and Silver winners. Having combed through hundreds of submissions over the years across many countries and continents, we can clearly discern patterns in how companies achieve excellence. While not all companies share each and every characteristic, there is enough commonality to detect seven distinct paths for achieving excellence. When several of these characteristics are combined in a single installation, it often results in visionary companies moving the competitive goalposts for their industries.

First Path--Involve Users and Customers from the Very Beginning.

One hallmark of a truly excellent implementation is a high level of user involvement, not only in the design phase, but also in all phases of the project. Companies that excel in imaging and workflow understand intuitively that "users know best." For example, in the case of Trigon Blue Cross Blue Shield, user teams and project team leaders worked together to change the very nature of the customer service representative's job. By engaging users in defining how work gets done, companies can develop multifunction processes that enhance job structures, improve employee morale, and reduce employee turnover. A pattern emerges: companies excelling in workflow and imaging not only believe users should participate extensively in design activities (e.g. such as JAD, design reviews, and prototyping), but should also remain actively involved in enhancing the system following rollout.

Bank of America's Asia Division is another case in point. This business process-reengineering project focused not only on technology, but also addressed change management issues that could have otherwise derailed the project. Implementing a system across eight countries, Bank of America Asia Division concentrated on building a multi-disciplinary team, involving users extensively throughout the project, and using prototypes and pilots extensively to test ideas for the multinational implementation. Other companies must take similar steps to ensure the overall success of reengineering projects, particularly when multiple sites and multiple national cultures are involved.

Increasingly, companies will include customers in projects, in addition to involving users. Yarra Valley Water is a perfect example of a customer-centric project-customers were involved from conception to implementation and now provide on-going inputs for continuous improvement initiatives. Yarra Valley Water was not content to focus on the internal needs of the business, but oriented the project around the customer and the customers' customer throughout the project.

Second Path-Create Flexible Work Processes

One of the biggest challenges of work automation is that processes constantly evolve as business goals, needs, and work practices change; yet modifying applications to reflect those changes takes too long. Workflow addresses this problem by associating business process rules with roles and the routing of work. Many workflow systems, however, do not allow users to modify the automated process, but rely on programmers and system developers to make changes. When this happens, workflow can become out-of-sync with real world processes, just as with an out-dated, legacy application.

Consolidated Edison and the New York City Comptrollers' Office are excellent examples of organizations that developed flexible work processes. For example, when implementing its data-centric workflow system, Consolidated Edison shifted customer service from a back office operation to a more flexible, front office process. By linking workflow to the automated call distribution system, incoming calls and letters are assigned through the wide area network to a multiskilled workforce. This allows Con Edison to manage workload peaks and valleys on a constant basis, to allocate work independently of geography, and to achieve work force flexibility on a daily and even hourly basis, while reducing customer wait time.

Third Path--Empower Users to Design and Modify Their Work Processes

The third path, empowering users to design and modify their own processes, is closely linked to the second path, creating flexible work processes. Yet many committed to the second path do not move beyond that approach by empowering users to change or adapt the automated process to their personal style. Visionaries recognize that flexibility should not only be built into the process, but also be pushed down to the users who are closest to the process.

One of the biggest work automation challenges is that business processes constantly evolve, yet modifying computer applications to reflect those changes takes too long. But as more organizations adopt case-management approaches for production work, user involvement in modifying and updating structured work processes will become increasingly more prevalent. Future implementations will be less pre-structured, more adaptable to changes in business processes and designed for users to make changes as exceptions occur and business processes evolve.

For example, although Con Edison and the NYC Office of the Comptroller require structured processes, both organizations have implemented flexible systems that allow users to modify processes. At Con Edison, "reengineering on the fly" allows customer service reps to change the workflow literally as work is processed. While at NYC Comptroller, users can access macros that adapt the workflow tasks to their personal work styles. These examples highlight that structured processes will become more flexible and adaptable to user work styles.

Fourth Path-Transcend Departmental and Geographical Boundaries

Workflow has its roots in departmental solutions. Typically "enterprise-wide" really means a big departmental solution instead of a true enterprise-wide system that transcends organizational and geographical boundaries. However, unlike more typical installations, the NYC Comptroller's Office project involved extensive BPR and workflow in multiple departments across four separate NYC agencies. While admittedly a challenge for many corporations, this feat must have been doubly difficult for a public agency, particularly since it involved standardizing core business processes (e.g., customer service), previously done differently within each agency.

Geographical work barriers are also being breached. For example, Con Edison has piloted a workflow project that directs incoming calls and related work items to telecommuters via ISDN lines. This allows handicapped and physically remote workers to process work exactly as if they were in the office. The visionary dimension is that the pilot supports a production process rather than the more typical ad hoc work done by telecommuters, demonstrating that the constraints of bricks and mortar can be overcome for clerical workers too.

Fifth Path-Implement Enterprise-Wide Solutions

The workflow and imaging industry has long talked about enterprise-wide implementations, but in reality those systems are very large-scale departmental solutions. But as more companies shift to cross-functional processes, enterprise-wide solutions will become a reality. Enterprise-wide processes, such as Infocamere's challenge to provide corporate records to more than 104 independent sites throughout Italy, will become more typical than atypical.

Companies wishing to gain competitive advantage through workflow and imaging must shift their focus from narrow, departmental solutions to an enterprise and extended enterprise approach. Anything less, while still generating benefits, will no longer differentiate the company, particularly as departmental solutions become more prevalent in many industries.

Sixth Path-Extend Beyond the Enterprise to Reach Business Partners and Customers

Visionary companies are now using workflow and imaging to extend information and processes to customers and trading partners. For example, Capital Blue Cross has implemented a multivendor imaging system that supports health claims processing in three separate organizations (Capital Blue Cross, Pennsylvania Blue Shield and a CBC/PBS subsidiary, COMP I). Overcoming the challenges of transferring image formats from one vendor to another, Capital Blue Cross can now transfer claims from multiple mainframes across the five-site, three-company extended enterprise.

In a similar vein, Trigon's remote imaging and workflow satellite office at Newport News Shipbuilding supports 13,000 members. Using the same remote software as Con Edison, Trigon brings customer service to the customer's workplace, demonstrating how workflow extends the enterprise.

Yarra Valley Water, a utility in Melbourne, Australia, has recently implemented one of the most innovative, customer-centric, workflow and image-enabled business processes in the world. One of three new water retailers created through recent government restructuring, Yarra Valley Water recently installed document imaging, COLD and workflow to provide customers (law firms and plumbers) with on-line access to property sewage plans and associated mapping information. Law firms can access Yarra Valley's system via modem to submit property requests and receive property information on-line, with a money back guarantee for service levels, while independent plumbers can access Yarra Valley Water from eight plumbing supply facilities, receive information electronically without intervention, and pay on-the-spot for the service. Yarra Valley Water's vision in providing "any time, any place" customer support sets the standard for companies seeking to implement document imaging, COLD and workflow.

Seventh Path-Look Beyond Conventional Wisdom When Implementing Technology

Following conventional wisdom often leads to conventional systems that, while generating benefits, do not shift the competitive ground for an industry. Visionaries often challenge conventional wisdom, or are not content to live within its constraints. Some of the "truisms" that the 1996 award winners challenged include:

bulletOCR is not a viable technology for high-volume data entry;
bulletimaging does not work on a large scale basis because large file sizes are difficult to transfer across multiple locations;
bulletmicrographics and optical storage do not mix; and-most importantly,
bulletBPR projects fail.

Martinair Holland, a Dutch airline, recently installed an imaging system to automate flight coupon retrieval. The system involves high speed scanning of flight coupons and OCR for high volume data entry. Through this installation, Martinair Holland has demonstrated that scanning items (e.g. flight coupons) and using OCR for indexing is not only viable, but can raise the bar for competitors by reducing the cost of back office ticket handling. Martinair Holland was successful in this project because careful attention was given to designing effective scanning and indexing procedures. User involvement was also key, since capture subsystems involve a significant amount of document preparation and quality assurance. By taking on the conventional wisdom, Martinair Holland set a new competitive standard within the Dutch airline industry.

Infocamere flew in the face of conventional wisdom from another perspective; it implemented a large scale, multi-site imaging system utilizing a number of image delivery mechanisms, including fax, e-mail, DAT tape, CD-R, and image transfer via wide area networks. Companies frequently shy away from large-scale, multi-site imaging installations because of concerns about network load and system performance. Companies that have this requirement, yet are reluctant to implement image delivery over WANs, should investigate alternative ways to capture and deliver images. In a very dramatic way, Infocamere showed it is possible to achieve large scale imaging in an exceedingly short time scale, and with significant benefits.

The conventional wisdom is that microfiche and optical storage do not mix-period. But to lower storage costs, Gak Netherlands, made extensive use of mixed media, including microfiche, roll film, CAR, Magneto Optical and CD-R. Since no vendor offers the comprehensive mix of storage media Gak Netherlands sought, the IT group within Gak Netherlands served as the internal systems integrator. Having gone this far, the integration group decided to integrate other third party software. For example, Gak Netherlands believed that work management would be better supported by integrating workflow with Baan's industrial logistics software, and by developing modeling tools in-house. This approach is definitely not the conventional approach for implementing imaging and workflow.

Several of the 1996 Excellence Award winners also successfully challenged the well-accepted belief that 75 percent of BPR projects fail. For example, when recent legislation shifted Gak Netherlands' customer base from 280,000 corporate customers to seven million individuals, Gak Netherlands decided to undergo extensive business process reengineering in an extremely short timescale. Not only did this project succeed, Gak Netherlands downsized the employers' insurance department by 50 percent (from 240 to 125 employees) while growing the customer base at an exponential rate. Similarly, Bank of America Asia Division's workflow and imaging project was \ by business process reengineering principles. In undertaking this project, the company developed a class for managers, IS and end users, focusing on technology concepts and reengineering principles. More than 300 individuals have taken this continuing class.

Moving the Goalposts in a Changing Competitive Environment

While today's visionaries have implemented technologies and applied the best management practices to achieve successful implementations, the competitive environment continues to change. The 1996 Gold winners-Capital Blue Cross, NYC Comptroller's, Yarra Valley Water, Gak Netherlands, and Infocamere-and the 1996 Silver winners-Trigon Blue Cross Blue Shield, Consolidated Edison, PPP healthcare, Martinair Holland and Bank of America Asia Division-represent today's most successful imaging and workflow installations.

But new projects are being planned, and even now, visionaries are in the midst of implementing systems and processes that will shift the competitive balance in their industries. Companies seeking to mirror the successes of proven winners should not merely emulate these installations, but anticipate where the document management and workflow markets are going. Future directions include migrating workflow and document management solutions to the web; expanding document management beyond text and image to incorporate video and sound; allowing customers to submit electronic documents via the internet; workflow-enabling processes between trading partners and customers; and integrating workflow with electronic commerce.

To compete successfully in the future, companies must focus on cross-functional processes that incorporate the extended enterprise. Customer service will be the single most critical battleground for both business and the public sector over the next five years. Companies can no longer sustain competitive advantage by relying on highly clerical, back-office, business-as-usual approaches to customer service. Competitive business/IT strategies must service customers whenever and wherever customers most need and value support.

While the Internet will facilitate reaching out to customers, developing solid, effective processes is and will remain the most critical success factor, transcending the decision to develop customer service applications on the Web or client/server platforms. Visionary companies and government agencies will derive substantial, tangible benefits by extending workflow-enabled customer support beyond business boundaries. To do so, senior management must have the vision to drive customer-centric IT investments; business analysts must design customer-centric processes; and IT must implement technology capable of delivering on-demand customer service.

Choosing a Workflow Vendor

Most visionaries view their relationship with the vendor(s) as a true partnership. When examining the details of successful implementations, there is most likely (but not always) a highly committed vendor or team of vendors that helped make their customers' success achievable. As a result, this is a good moment to examine how the selection of a workflow vendor impacts a company's ability to achieve excellence.

Why is the vendor selection particularly important for workflow implementations? Aside from the fact that any vendor relationship is an important partnership that needs to be evaluated carefully, the workflow market will undergo major consolidation over the next 2-3 years. With more than 80-workflow vendors competing in the US market alone, and looming market consolidation, companies must select their workflow vendors carefully.

Unless short-term departmental or technical needs absolutely override an organization's longer-term strategic IT requirements, corporate buyers should be wary of workflow suppliers unlikely to survive. This is particularly critical if the project is enterprise-wide or, will be implemented in phases, or if workflow is key to the company's IT strategy.

Despite the illusion created by trade publications, the market has been tough for most vendors. In fact, it has been downright treacherous: competition is keen, price declines have been steep, and workflow is both complex and time-consuming to sell.

The Seven Deadly Sins

Struggling suppliers are often guilty of the "seven deadly sins" which include:

bulletRelying on systems integrators for sales; this is foolhardy-integrators are driven by specific projects rather than corporate commitments to vendors.
bulletOverspecializing in a segment that is too small to be commercially viable, especially given that the demand for non-imaging workflow is still fairly low
bulletInsisting on solving all workflow problems in virtually any business setting. Many vendors mistakenly pursue a "one size fits all' approach, wasting limited resources on unfocused sales efforts while losing opportunities to deepen skills.
bulletBeing unaware, unclear, or confused about customer requirements. For example, systems integrators' expectations differ vastly from those of user organizations, just as non-technical developers require different features than IS developers.
bulletNot listening to potential customers' input, feedback, and requirements. This problem often surfaces in the demo, proposal, or site visit.
bulletTrying to be both small/simple and large-scale/complex with the same product at the same time (e.g., two integrated products may be better than one "highly scalable" solution.)
bulletNot recognizing that workflow is a people, process, and management problem. Some vendors fail to address critical non-technical implementation issues, putting the entire project at risk.

Workflow Supplier Evaluation Criteria

Key areas to examine include:

bulletVendor's ability to meet the functional and technical requirements
bulletInitial and on-going costs of ownership
bulletVendor's support and service policies
bulletVendor's financial position
bulletVendor's market position

These criteria must be examined in detail, whether the procurement involves a formal request for proposal/RFP (which is highly recommended for workflow purchases) or a short list of vendors reviewed on a less structured basis. Other crucial intangible factors include:

bulletReference accounts and site visits
bulletA proven track record in specific vertical markets and/or applications
bulletFinancial stability (source of capital, revenues, profits, cash flow, and debts)
bulletCompetitive positioning in workflow
bulletCommitment to open platforms, the Workflow Management Coalition (WfMC) and other standards, ( e.g., DMA)
bulletManagement stability and experience
bulletIndustry alliances and partnerships
bulletRelated/synergistic products
bulletGeographic coverage
bulletDistribution strategy

Evaluating Workflow Vendors

Buyers should look for workflow vendors with these profiles:

bulletThe vendor should be clearly focused on a sustainable market without deviating. (FileNet typifies a focused company; as it expands into document management, ad hoc imaging, and mass-market workflow, FileNet's market discipline is still not likely to waver.)
bulletSuccessful vendors, particularly smaller companies, are aligned with partners that enhance the vendor's competitiveness in target markets (e.g., Identitech's alliance with TSW has leveraged its presence in large utilities and manufacturing companies).
bulletVertical markets are the battleground for future sales. Vendors with clear strategies are likely to succeed; conversely, small vendors without a vertical focus will fail. (An excellent example of vertical focus is Optika's MediPower Group for medical records and patient accounting.)
bulletThe vendor's marketing program must clearly articulate how workflow solves business problems. Workflow requires "missionary" selling, but technology-driven companies often find it difficult to convince buyers.
bulletMessaging is crucial; successful vendors will integrate with one or more platforms, while avoiding direct competition with Microsoft
bulletThe Internet will be a key differentiator. Vendors that really solve the question of how to workflow-enable processes between suppliers, companies, trading partners, and customers will win big. (Action, while challenged in many areas, has taken a big step with Metro.)
bulletIncreasingly, the integration of business process modeling tools with workflow application development tools will become a differentiator.
bulletWorkflow is undergoing rapid change as it evolves from imaging-still the primary source of revenue. Successful vendors will strike a balance between workflow's origins and its future, while ensuring sufficient revenues in the transition.
bulletSuccessful vendors understand the difference between workflow as an application and workflow as a technology that enables applications. Only two or three workflow application vendors will survive the shakeout; the remaining successful vendors will shift to vertical solutions, packaged software, e-forms, or document management.

Technologies underpinning workflow are also changing. Successful vendors must keep abreast or ahead of the technology curve, including object-oriented development, component software, and emerging standards.

An Alternative View

If an acceptable return on investment can be achieved in a short time period, vendor credentials are less important. In these instances, the emphasis should be on selecting the right product features and functionality rather than using the vendor's long-term staying power in workflow as a knock-out criterion.

It is virtually impossible to pick the winners for a consolidating market, so rather than trying, users should focus on buying the best solution for the problem at hand. Plus, serendipity may occur; for example, a struggling vendor with an exceptional product may be acquired by a marketing juggernaut (sort of like when Wang bought Sigma). Instead of wasting time on crystal ball gazing, users should focus on identifying the requirements and matching the right product to those needs.

The Bottom Line: Findings, Conclusions and Recommendations

bulletThe market has been tough for most vendors: competition is keen, price declines continue to be steep, and sales are both complex and time-consuming.
bulletWorkflow tools will be incorporated into application development frameworks, middleware, e-forms products, document management products, and packaged application software.
bulletAt the low end, workflow will rapidly shift to electronic messaging, platforms and the Internet, leaving the workflow applications market dominated by mass-market software companies.
bulletVendors with clear vertical market strategies are likely to succeed; conversely, small vendors without a vertical focus will fail.
bulletMessaging and groupware are crucial; successful workflow vendors will integrate with one or more messaging platforms, while avoiding direct competition with Microsoft.
bulletThe Internet will be a key differentiator for workflow vendors.
bulletThe integration of business process modeling tools with workflow application development tools will become a differentiator.
bulletSuccessful vendors must keep abreast or ahead of the technology curve, including object-oriented development, component software, the Internet and emerging standards.
bulletA formal request for proposal is highly recommended for workflow purchases. Key areas to examine include:
bulletVendor's ability to meet the functional and technical requirements
bulletInitial and on-going costs of ownership
bulletVendor's support and service policies
bulletVendor's financial position
bulletVendor's market position

Workflow buyers should closely evaluate prospective suppliers' long-term viability in the market, eliminating vendors with high-risk profiles from serious consideration. Factors include:

bulletReference accounts and site visits
bulletProven track record in specific vertical markets and/or applications
bulletFinancial stability
bulletCommitment to open platforms, the Workflow Management Coalition, and other standards
bulletManagement stability and experience
bulletIndustry alliances and partnerships
bulletRelated/synergistic products
bulletGeographic coverage
bulletDistribution strategy
bulletVendor credentials are particularly critical if the project is enterprise-wide, is key to the IT strategy, or involves a phased implementation.
bulletBuyers should not give priority to product features over vendor credentials, unless urgent business needs absolutely dictate a short-term focus and the payback is less than one year.

Conclusion

Workflow and imaging technologies have far-reaching implications. Reading the implementation case studies in this book will provide a valuable blueprint for companies trying to understand what constitutes excellence in practice. Equally as important to read, however, are the chapters that follow the case studies. These offer guidelines to process change pitfalls and insights into the perspectives of the various stakeholders in any successful implementation.

When asked what single event was the most helpful in developing the theory of relativity, Albert Einstein is reported to have answered, "Figuring out how to think about the problem."

That is an excellent way to start any process improvement project.

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This chapter was excerpted from Excellence in Practice: Innovation and Excellence in Workflow and Imaging. Published 1997. Quality hardcover. 352 pages. US $50.00 Retail. Table of Contents
©.Copyright protected: No part of this chapter may be reproduced in any form or medium without written permission of the publisher.

Click here to read about:
EXCELLENCE IN PRACTICE VOLUME II
EXCELLENCE IN PRACTICE VOLUME III

EXCELLENCE IN PRACTICE VOLUME IV

Workflow Handbook 2001

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