Compliance

Achieving compliance is no easy task for any
company. In today’s world, compliance is a big factor because it helps you
differentiate from your competitors and deliver good and high quality products
to customers. These factors translate into increase revenue for the business.

If compliance comes as an obligation because of
law enforcement, still is something that will benefit business by staying in the
game.

Business process management
software helps in a
big way to follow compliance scenarios by helping companies enforce processes
through out the organization in a simple and transparent way. For example:

- ISO-9000: one of the requirements of ISO 9000
is to have the organization to adhere to processes for quality management and
improvement. BPM applications can help companies achieve this with minimal
costs.

- Sarbanes-Oxley: one of the requirements of
SARBOX is to audit financial transactions. With workflow and BPM products, all
transactions are audited, including approvals, task completition and rejections.
Besides that, you also get process enforcement in the organization.

- CMMI (Capability Maturity Model): This is
like ISO 9000 for software companies. For a company to operate from Level 2 to
Level 5 of CMMI, it must have in place a series of processes for developing and
testing of software. This guaranties that high quality software is been
delivered to the customer. BPM products helps process enforcement and
definition, like the
requirements
gathering process
.

In general, achieving compliance for a company
can be very costly, and sometimes there’s no option. BPM will help organizations
with compliance and, at the same time, keep achieving costs down.

The Art of Policies in Business

When we think about policies, the first thing
that comes to our minds are the rules we must comply when we work in a company.
Companies around the world have policies. Every one has, and almost no company
have the same and equal policies that others have.

Also the amount varies. Big companies have much
more policies than small and medium businesses. Policies help businesses keep
things under control. In my theory, that’s why big corporations have more
policies than smaller ones. In a 50,000  employee company, there have to
certain rules available to keep things under control. You can compare this with
a country. The bigger the country, then bigger the amount of laws. The absence
of policies could lead a big company into chaos, leading every one of the 50,000
employees to do whatever they want and go in different direction for completing
a task. I think they are needed if you want to manage that amount of people
under one structure.

But, while the amount of policies in a company
increases, also the processes and bureaucracy for making what once was simple
things. Tasks become more tedious. Check in a file into the repository, ask for
a
expense reimbursement, ask for your vacation, getting approval for a purchase
order; you can come up with thousands of examples. But one thing is for sure:
everything becomes more slower.

That’s why small firms must be more faster and
adaptable than larger firms (definitively a
competitive
advantage
). It’s easier to keep track of work with fewer employees. And
every knows how to do their tasks and what rules to comply, because that’s the
way we do things around here, everybody knows that. You want to start blogging
about your business, you go, get an account and that’s it. Big companies don’t
do it. They have to develop first a policy that every employee must submit if
they want to blog. But there’s a balance: every company wants to grow, increase
revenues and for that, you have to increase the amount of employees. Following
what we have said, you will also need to increase the amount of policies to keep
the environment of your office from coming to a chaos.

You can do various things to keep this from
happening. One I think is to try to have like independent teams inside your
company. For example, if you are planning to launch a new product or line of
product, try to put the people in charge of doing this task in a structure like
if they were independent. Like a company apart. This will give them the freedom
and creativity necessary to drive things through. It’s like growing the company
without actually growing the structure. This people can report directly to the
CEO or President.

One other thing that can be done is to enforce
policies in the company in way so transparent for the employee, that he doesn’t
notice that a policy is been applied. And how you can get that? How do you get
your officers to not notice they don’t have the right level of approval for a
certain loan request? When you use
business process
automation software
, like workflow,  processes and rules (policies) of
the company are enter in the software. Then the software drives and enforce the
process and end users just have to complete their tasks. I like to call it “the
good parent”. They always hold their sons by their hands.

Now you make processes and policy enforcement
faster
inside the company and you don’t have to train everybody to comply with the new
rules. That rules sit on a repository, and everyone complies with it or the
process don’t go forward. So training costs go down and also the people require
to watch for policy enforcement. You’re making things simpler.

If you combine the two options above, you have
an ultra fast company. Operating and completing tasks in much better way than
the competition. 

Software and ROI

What would be the final objective of
implementing software in your organization? Definitively to increase performance
and productivity, being the final, I thing,  the most important one. Every
single task can be done manually, even finding your credit report in millions of
papers, in a big close room, can be done.

But not every software in your company will
bring the same benefits it could bring to other companies. An image editing and
processing software could be a huge benefit for publishing and media companies
while not a lot for the financial industry. It depends on the process you are
trying to automate and what are the costs of executing this process.

One way you can know the benefits of
implementing a software is calculating the Return Of Investment (ROI) of the
project. What is the actual cost you will be reducing by implementing the
software. Let’s make an example:

A vacation request from an employee needs the
approval of his direct supervisor and the approval of the HR department. After
your boss questioning for two days about the necessity of you taking that long
deserved vacation and your involvement in the project of reducing the amount of
pencils on the companies employees desk, he finally approves your application.
Then HR department also investigates and approves the request. Calculating the
hour cost of our boss in $100 and the person in HR department in $95, we could
have the following table:

Activity Hours Cost
Supervisor Approval 5 500
HR Approval 4 380
Subtotal   880
By 100 request a
year
  $88,000

We have calculated the actual cost of
processing vacation request in a total of 88,000 thousand a year. Now let’s
assume that you implemented a workflow software with electronic forms
integration and have automated the whole vacation process. You could reduce the
time taken routing the actual paper form, reviewing and locating  the form
by 50%, then you could have the following table:

Activity Hours Cost
Supervisor Approval 2.5 250
HR Approval 2 190
Subtotal   440
By 100 request a
year
  $44,000

You are saving 44,000 thousand that could be
use in the business for raising wages. Your return on investment is 44,000
thousand if you implement this kind of software. One of the good things about
workflow and process automation software is that you begin realizing the value
of it since day one of the implementation, and
this is only one process. Automating other processes through out the
organization will lead to fewer costs also.

In an enterprise organization, the benefits of
this kind of software are huge because of the reducing costs they lead. But I
think that small and mid businesses also take a huge benefit. Not only are they
reducing costs, but they are also building the infrastructure for a competitive
advantage against big corporations. For example, in SMB, the HR department isn’t
typically big. As the company grows in amount of employees, you would normally
need to increase the HR department, but this is not true if you have automated
the core processes of HR.

The benefits are even higher when you automate
core processes of your business, like software construction in a software
company, loan requests in a bank, legal cases in a law firm, etc.

Always calculate the ROI and the benefits the
software will bring to your organization.

Speed

No, this is not a publicity for the movie.

What is one of the biggest advantages a
MicroISV or Small ISV has over big software corporations? That’s right. I think
is speed. Is the capacity of getting good software out to the market in a small
time frame. And why this could be an advantage?

If we take a look back in time, one of the
reasons software products loose the battle to other
products is because speed. Take a look at Internet Explorer vs. Netscape some
years ago. One of the biggest flow with Netscape was their ability to take new
versions quickly to the market. If my memory don’t cheat me, back in that time
you could see a new version of IE almost every six months, and with a ton of new
features. This is pretty quick for a company as big as Microsoft. If Netscape
could figure out a way to build new versions quicker and rival IE, maybe it
could have had a chance. Of course, you cannot only take this factor into
account, but I think is one of them.

Take also a look at
Project Aardvark, of FogCreek
Software, they manage to build a product, market it and take to the clients in
almost three months. That’s pretty a quick step. Big software companies can not
take this luxury. But, by the time, they are making money out of it.

With
Procx for example, we
are able to add activities that business processes uses very fast and in a
standard way. For example, we needed to add the capability to use SharePoint
Document Library fields (columns) inside the process for making decisions. We
added this functionality in a week and customers are the ones getting the
benefit of this.

Another good thing about speed is the ability
to easily adapt to changing environments and technology. Taking a product to
work in other operating systems like Mac o Linux is no easy task but been small
ISV’s things are different.

So you can say speed in small ISV’s is a
competitive advantage. They can increase the amount of innovation they put in
the hands of customers at rate higher than other software companies. It’s like
getting there by plane and letting the others get there by car.

The electronic enterprise

A joke: How do you think companies in the future will look like? Well, they will be composed of three basic elements: a computer, a security guard and a dog. Why? The computer will run the business; finance, sales, operations, etc. The security guard will keep the computer from been stolen or damage. The dog will keep the security guard from touching the computer.

As more and more software comes out for automating processes in the enterprise, things will become simpler to manage than they are today. But of course, there are so many things a company does, that for fully automating it we would have to tackle hundreds of processes.

So, divide and conquer. Taking one processes at a time will take you to automating routine tasks, like the expense report application, to automating a full department.

Companies starting to get bigger would be easier. Imagine a small company or midsize company automating their process of expense report; at the end they could have an accounts payable department a quarter of a size of an enterprise managing the same volume. That’s what you get automating business processes.

Also, the most important interaction a company has is with its clients and we can also automate that as much as possible (of course, without forgetting customer service). But imagine a customer self service internet site where clients requests their needs and automatically this enter an automated business process. Using Procx for example, you can have forms like the standard XForms or XML, that after the customer hitting submit, automatically enters a workflow inside the company.

With all these things we can imagine a more and more automated enterprise, tracking every process and knowing where everything is. I like to call it the coordinated enterprise. Every process is hook together with one another and everybody in the business knows what to do that also translate in client expecting what the service offer will be.