As confidence in the banks declines, the hunt is on for innovative tools to increase transparency and improve business performance. Process Intelligence is a new technology offering a glimmer of hope in sombre times. The benefits of Process Intelligence are twofold. It is of fundamental importance to both performance improvement and risk management, because it improves our understanding of how results are actually achieved.
These are turbulent times for the banks. Confronted by the credit crunch and a slump in share prices, profitability and confidence have suffered a severe blow. Add to this the slowdown in the economy and the effect is devastating. What can banks do to simultaneously regain control of their business performance and manage risk effectively? The availability of good and, above all, timely management information is crucial in this regard. Although financial indicators may reflect the symptoms of possible problem areas, they do not expose the underlying causes. To uncover the real reasons behind unexpectedly poor performance, a detailed analysis of the underlying process behavior is required. Better management and improvement of business performance is all about better management and improvement of business processes. This is where Process Intelligence can help.
Every company needs information to support its decision-making. With margins under pressure and constant exposure to risk, retrospective information is not enough: proactive management is a prerequisite for targeted action. Traditional management information systems and business intelligence fall short with respect to the speed and nature of the decision-making information they deliver. Although necessary, they serve a different purpose, which is to render account to internal and external stakeholders. Conventional business intelligence is inherently static, with measurements and indicators only becoming available in retrospect. Such systems monitor the performance of operational management on a (medium to) long-term basis to verify the success of policy and strategy and to support the decision-making process. But although results expressed in indicators and ratios may show the direction in which the organization is headed, they tell us nothing about the real causes. This means there is a serious risk of only treating the symptoms. Worse still, measures may be taken which are counterproductive or have no more than a short-term effect. Other – complementary – management information is needed to make informed decisions. A number of banks are now obtaining precisely this kind of information with a new form of business intelligence that provides insights into how results are achieved. Reconstructing an actual process from end to end reveals actual process behavior and leads us to the heart of the problem, opening the way for targeted, structural management and/or improvements.
This latest form of business intelligence is often referred to as Process Intelligence. Process Intelligence is inherently dynamic – the measurement data is already available while the process is being executed. Process Intelligence does exactly what is needed and fills a gap in the current market situation by meeting the need for transparency to counteract unnecessary risk. Results are more predictable and corrective action can be taken if things threaten to go wrong. This new technology thus puts banks firmly back in charge. Process Intelligence tools monitor business-critical processes on a real-time (seconds, minutes, hours) or right-time (days, weeks, months) basis to anticipate problems or deviations and identify potential areas for improvement. These tools are also known as Process Performance Management (PPM) and Business Activity Monitoring (BAM) software. Traditional and new technologies complement each other perfectly because they are different in scope and application. I
f you want to learn more about Process Intelligence, please have a look in the ARIS Expert Paper Library. You will find a range of contributions, including the expert paper 'Process Intelligence puts the banks back in charge'.
James Taylor said:
Well I have to disagree. For a bank what it really needs is DECISION intelligence - live monitoring of how well it is taking risk-based decisions within those processes. Knowing about process may be helpful but knowing what decisions are being taken, why and what the impact is matters more.
JT
James Taylor
Author of Smart (Enough) Systems
I am not stating that process intelligence is the holy grail, just that conventional business intelligence does not suffice. There are many new forms of business intelligence, process intelligence being one of them. They all have in common that they look past the “What” and provide answers to the “How” and “Why” things happen in order to take timely and adequate measures. Process intelligence in particular reveals process behavior to see if procedures are adhered to and even influence this behavior while the process is running. Although its primary driver is to improve business performance, it certainly can be applied to manage risk — complementary to technology that specializes in this area.
I think will the value of business process management and process intelligence is dramatically enhanced by companies who have a predictive anaytical tool in place. I will go as far to say that without this the level predictive results can be questioned. With the BPM, EA and IT planning tool Predictive anaytics form two of the pillars of the responsive business platform. In a few cases I have analysed the Predictive analytics payback is between 9 -15 months and is a key enabler for business responsiveness. Business decision management(BDM) like business rules management(BRM) is part of process management and process intelligence. Ricardo and James I would love to hear about practical examples in this space.
