Any type of solution that generates $350 million in new projects annually is likely to draw the attention of the insurance industry. Thats the figure research firm Celent predicted in February for business process management (BPM) in 2004. A May META Group report asserted, Business process models will become the central point of organizations for many systems. The sophistication of these models will increase 2004-2007.
Understanding what BPM is can be a daunting taskgobs of providers tout their BPM-inspired wares (for more, see p. 16). Celents BPM report noted, Vendorswho 12 months ago were happily embedded in categories like enterprise application integration, workflow, document or content management, CRM, or business intelligenceare repositioning and/or redesigning their offerings. At a conference in June, Rod Travers, senior vice president, technology, for consultancy Robert E. Nolan Company, confirmed just as with CRM, vendors tend to define BPM systems to fit their offerings.
So, whats an insurer to do?
Perhaps learn from others. Regional carrier Shelter Insurance found it had a somewhat common problem: With its mainframe legacy systems and the later addition of Web applications (for more on mainframes, see p. 29; for more on Web services, see p. 24), users had to go to multiple nonintegrated systems, which created a variety of workarounds, according to Michelle Navarro, information services analyst and project manager, who co-presented with Travers at the conference mentioned above.
The carrier decided to explore BPM. We wanted to look at the process first and the technology second, said Navarro. Because all of this looked so overwhelming, and we had no experience, we went to a third party [for help]. The vendor landscape was huge, she added. Everybody had the solution that would be just perfect for my company.
In working toward the pilot, Shelters experience turned up several useful lessons and guidelines, including: Involve both business and IT and form a project team to take ownership. Be precise and careful in strategy, requirements, and the RFP process. Begin small but big enough to get useful measurements.
METAs report indicated some risks: Avoid spending too much time considering the current state from every angleit will cause the process to become convoluted and complex. Dont spend significant time discovering all paths to execute the processthat can set a false expectation one will win over the others. Also, be aware organizations that focus on their current process run the high risk of becoming emotionally attached to the old process.
As Franklin Roosevelt said, Theres nothing to fear but fear itself. Still, the META report added: A true shift to a process-organized business will take decades. Those insurers considering BPM, however, shouldnt delay too long, since performance and cost rewards may be waiting and achieving the correct process culture (beginning with individual departments and expanding enterprisewide) takes time. Just remember, though, when the ground is shifting, the successful carrier will explore the terrain diligently.
Sharon S. Schwartzman
Editor-in-Chief
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