The Next Big Thing
Posts about next generation technologies and their effect on business.

BPM is the Beginning of the End of ERP

In a recent article, Jack Vaughan quoted Jan Baan as saying, "The successor of ERP is BPM....ERP is becoming the model of complexity.  It has become too complicated."  Baan is CEO of Cordys and former head of Baan Corporation, an ERP vendor.  BPM (Business Process Management) is the leading edge of a major change in enterprise systems.


Much has changed since the heyday of ERP.  The Internet and internet technology has changed communications and integration.  Businesses are on-line and accessible from anywhere, any time.  The marketplace has become global for all enterprises, not just large companies.  The pace of change has accelerated, and information technology is pervasive in the operation of the enterprise and in society in general.  Business services are accessible, ad hoc, over the Internet, and service oriented architecture is changing not only the design of computer systems, but the design of enterprises.


ERP systems are traditionally monolithic solutions for automation of business operations.  They provide a solution for a particular way of doing business and typically require a major investment in implementation and adaptation to align the solution and the business operation.


The future requires enterprises, as well as systems, designed for change.   BPM, supported by business process management systems (BPMS) enables flexible automation of business processes.  ERP systems traditionally embed business processes in the code so that changes to business processes become IT projects.  A BPMS provides the opportunity to model and automate business processes in a way that is visible and adaptable by business people.  The BPMN 2.0 standard from OMG (Object Management Group) defines BPMS notation and modeling elements for defining and automating repeatable business processes. 


Not all business processes can be pre-defined and repeatable.  Some processes require ad hoc planning and decision-making by humans where actions are driven by the state of a case and records related to the case.  We characterize such processes as case management processes.  Some ERP systems provide record-keeping for case management.  Many other case management processes remain paper-based and manual because they don't fit the definable, repeatable model supported by most BPMSs.  OMG has initiated development of a Case Management Process Modeling (CMPM) standard for design and automation support for these processes, thus moving beyond the automation capabilities of ERP systems.


BPM, including case management, will improve the effectiveness and agility of business processes, but it does not necessarily improve the agility and overall efficiency of the enterprise.  Enterprise agility and efficiency involves changes to the design of the enterprise.  It requires the ability to rapidly adapt or create business capabilities and the ability to engage existing capabilities in new ways.  ERP systems are a barrier to such changes.  This agility is enabled by exposing business capabilities as sharable services.


In Business Capability Mapping: Staying Ahead of the Joneses, Denise Cook describes how business capabilities, at an appropriate level of granularity, represent stable components of the enterprise.  As services, these capabilities can be engaged by different business processes to meet the needs of different lines of business and adapt to changing business strategies.  These services must be loosely coupled so that they are independent of the individual lines of business to which they contribute or may contribute to in the future.  In Why SOA is a Business Necessity, I describe the importance of this service oriented architecture (SOA).


The identification and management of business capabilities as services requires a specialized discipline beyond conventional BPM.  This need is addressed by value chain modeling.  Value chain modeling was introduced by Michael Porter in 1985.  For more on value chain modeling and its various incarnations, see Value Chains and Other Processes, by Paul Harmon.  Value chain modeling brings a focus on the delivery of customer value and the capabilities that are required.  This analysis has been used at the executive level in strategic planning, but it typically lacks the detail to identify the stable units of capability that should be engaged as services.  This more detailed analysis as well as the design and management of shared services require a modeling environment to manage the complexity. 


This need will be addressed by a specification for value chain modeling being developed at OMG in response to the Value Delivery Metamodel RFP.  A value chain model will define the network of activities that contribute to the delivery of customer value.  These activities represent uses of business capabilities.  Different lines of business may have different value chains that define the uses, or potential uses, of shared capabilities. In addition to consolidation of capabilities for economies of scale and agility, this perspective supports consideration of investments in improvement as well as outsourcing and configuration of joint ventures.  Optimization will shift to an enterprise perspective, to reflect the cross-enterprise impact of shared capabilities that serve the needs of multiple lines of business.


This architecture is quite different from conventional ERP systems.  The business processes will no longer be embedded in program code.  The functionality that supports the stable business capabilities may be much the same, but it will be carved out to support loosely coupled services.  BPM is the beginning of the end for ERP systems as we know them.


We are in a state of transition to a new business paradigm.  The full transformation of enterprise systems and the enterprise will involve BPM, loose coupling of business capabilities and additional modeling capabilities that together will provide an enterprise architecture model from a business perspective.  Cordys and Hewlett-Packard are at the forefront of defining the business modeling specifications discussed above and the development of future enterprise architecture modeling capabilities. 

Sharing complex information with Heat Maps

We're
always looking for ways to more easily convey complex information. The use of a
heat map to show complex
information is not necessarily new but until recently I only found very
deliberate and almost proprietary implementations for specific data sets.


Fellow
Rolf Kubli shared the use of heat maps in a blog
post
last year. The implementation he shared is called GridMaps, which shows grid
services monitoring in an easy to understand manner.


I
had also been exposed to Panopticode,
an open source application code quality analysis tool, which uses a heat map to
make code quality metrics more understandable and also show correlations between
various source code metrics.


I was about to create a heat map to help show complex relationships between
projects, their size and their impact when I stumbled upon an out of the box
heat map tool called Heat
Map Explorer
from Lab Escape.  I downloaded the 14-day trial and within a
few minutes I was able to create a meaningful heat map with data from a
spreadsheet.


Lab
Escape has a newer version of their product in beta which I have not yet tested
but will be shortly.

Can MiCare/PHR + VistA/EHR provide a new model for wellness (HWR) in the US?

In 2008, the Department of Defense (DoD) developed a prototype, Personal Health Record (PHR), and piloted it at Madigan Army Medical Center (MAMC). A PHR is typically a health record that is initiated and maintained by an individual.


MiCare is designed to help members of the military and their families more effectively to manage their health and wellness, regardless of their location. They will need to seek care inside and beyond the Military Health System. In essence, MiCare serves as a patient-centric health record, aggregating documentation and information from all sources of healthcare in a location accessible to the beneficiary. Based on the success or the pilot, the DoD is now determining how to expand it more widely according to InformationWeek.


It is important to note that PHRs are not the same as EHRs (Electronic Health Records). An Electronic Health Record (EHR)refers to an individual patient's medical record in digital format. The Veterans Affairs (VA) EHR system is called the Veterans Health Information Systems and Technology Architecture (VistA). Like the data recorded in paper-based medical records, the data in EHRs are legally mandated notes on the care provided by clinicians to patients. There is no legal mandate that compels a patient to store his or her personal health information in a PHR.


Can the combination of a patient maintained health record like MiCare and a clinician maintained health record like VistA provide a new model of Health and Wellness Record (HWR) that improves wellness, quality, care, and reduce overall healthcare costs?


Let's hear from you.

Further evidence of a resource shift

Today, I was getting ready to talk to a group of MBA candidates at SMU and was looking over the kinds of questions they are planning to ask me about the job market and what to expect and thought I'd do some digging for what else is being said in this space.

 

I have blogged about changes in the use of personnel and the shifting workforce:
What if we were to apply service oriented concepts to people
Further thoughts on the future of employment

 

There was an analysis done recently showing that if you were born after 1985, you are significantly more likely to create your own business than join in a traditional corporate, employee relationship. With venture funding up (based on an article in Red Herring) it looks like there are $$ out there to help get things started.

 

When you add in the possibility of grid computing becoming commercially feasible in the near future, it should make for a much more flexible environment than most people feel comfortable with, in the IT space.

 

It is most likely a case of when, not if, so we'll need to get ready for an interesting ride.

Labels: Grid computing
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About the Author(s)
  • Steve Simske is an HP Fellow and Director in the Printing and Content Delivery Lab in Hewlett-Packard Labs, and is the Director and Chief Technologist for the HP Labs Security Printing and Imaging program.
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