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1/7/2005
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Convergence Up Close

These real-world BPM, text mining and EII deployments demonstrate the value of uniting data and content. But which technologies are ready for your enterprise?



On the front lines of IT, dealing with both data and content is nothing new. Organizations have long had to correlate structured data with semi-structured and unstructured documents, e-mail messages, images and other forms of content in order to complete transactions, answer customer questions and make business decisions.

What is new — or at least evolving rapidly — is the ability to easily tap into all forms of information to automate transactions, provide better service and gain deeper insight into customers and competitors.

Two to three years ago, human interaction was almost always required when transactions involved content. Data and content integration demanded customized, API-level links that were expensive and time-consuming to develop, limited in functionality and prone to failure with each new software upgrade. Knowledge management had gained interest, but outside of high-value applications such as pharmaceutical research and government intelligence, vast stores of content remained largely untouched.

Enter XML, Web services and service-oriented architectures, which have unleashed promising new technologies and new possibilities for automating processes, integrating information and performing analysis of both data and content. Successful business process management (BPM) implementations, for example, have rekindled the decade-old dream of automating workflows by tapping into data and content stores. Text mining techniques are lowering the costs of finding value in content, opening up practical applications such as product quality assurance and contract management. Finally, enterprise information integration (EII) products are making it easier to access data, and many suites are adding tools to tap into content. Read on to find out how these technologies are making better use of all forms of information and how they might transform applications within your enterprise.

BPM Spans Data and Content

BPM is all about developing more efficient, start-to-finish processes, no matter how many systems and silos of information are involved. The technology is middleware that lets you remove process design and business rules from the underlying applications. Most BPM systems include integration technologies that enable them to access information from any source to automate system-to-system interactions. The time-consuming integration work is handled up front, and the abstracted process can thereafter be modeled, measured and quickly changed, with minimal IT assistance, to continually improve performance.

At American National Insurance Co. (ANICO), BPM software was used to bring a complete view of the customer to both customer service representatives (CSRs) and Web self-help applications. Building that view required access to both structured data, from the company's data warehouse and Cognos analytics system, and customer-related content, including policy forms and images of bills and claims.

ANICO's old customer support process forced CSRs to wade through multiple claims systems, multiple provider systems and three-ring binders with paper reports. The average call handling times at the health claims call center was eight and a half minutes; many calls went on as long as half an hour.

Hoping to cut costs and improve customer satisfaction, the company launched a BPM initiative in 1999 using Pegasystems software. The first project focused on the company's health care call center, and the company has since replicated a core CRM process at call centers supporting two large marketing groups and a credit insurance group.

"When an independent agent or insurance customer calls in, the process taps into multiple back-end systems to bring all relevant customer information to a clipboard," says Gary Kirkham, vice president of planning and support. "We've developed anywhere from five to nine pathways [at each call center] that cover at least 85 percent of the calls. As the CSR steps through the process, business rules predict exactly what the customer is going to want to know, and we populate the appropriate information from the clipboard [to the screen]."

The processes are tied into customer status levels determined within the data warehouse, so when a top-selling independent agent calls in, process rules automatically route that call for priority handling by specialized CSRs.

Over the past three years, ANICO has focused on continual process improvement, eliminating bottlenecks, perfecting call pathways and integrating additional data and content. Performance has steadily improved, and it now takes an average of four minutes to handle the health claims calls that used to take twice as long. In one of the two marketing areas, the CRM process is credited with a 60 percent increase in business in its first year. Efficiencies across all four call centers have helped the company avoid hiring 20 to 30 additional CSRs to handle new business.

Get Content Out of the Way

Human interaction with content is a given in CRM, but in most other processes, businesses are pushing to minimize people-to-people exchanges with system-to-system automation. This was the case at Hasbro, where BPM has automated supply chain processes that extend from the toy company's headquarters in Pawtucket, R.I., to suppliers in Asia and on to retailers including Wal-Mart and Target. Content is still a part of the process, but it's there for the exceptions rather than for every transaction made.

"Our SAP back end was spitting out hundreds of thousands of documents per year, and we were faxing and mailing hard copies to suppliers and freight forwarders," says David Adams, Hasbro's business integration manager. "At least 80 percent of our purchase orders could have been handled with a rubber stamp, but if we had 100 purchase orders, we had to physically look at 100 documents. We needed to relieve ourselves of all that paperwork and handle management by exception."

Hasbro completed its first BPM pilot project in 2002, and using Lombardi Teamworks software, it has since extended procurement processes to thousands of products made by more than 100 different suppliers and delivered by 25 shippers. The process rules are designed around metrics such as service-level agreements and ship dates. Hasbro managers and suppliers log into a Web-based Teamworks process interface to monitor tasks and deadlines. When transactions fall out of a predefined tolerance range — say a shipment is a day late — the software raises red flags and sends out e-mail alerts to the appropriate managers.

Exceptions usually demand collaboration, and that's when the content comes into play. Teamworks taps into SAP data as well as related invoices, purchase orders and service agreements, which can be called up within the BPM software interface.

Hasbro's "low-seven-figure" investment in BPM helped it consolidate two supply organizations in Hong Kong, and Adams says the company is now managing twice the volume of goods with the 100-employee staff of just one of the original operations.

Adams says a next step being considered is deploying a performance database feature from Lombardi. "We're trying to develop reports on vendor responsiveness and scorecards on how well they're meeting service levels, particularly when it comes to shipping," Adams says. "'On schedule' is king, and we have to make sure Wal-Mart gets it on time."

BI and KM: The Eyes and Ears of Intelligence

Business intelligence (BI) is derived from structured data, and knowledge management (KM) is derived from content, but predictions have been kicking around for years that the two will inevitably converge. "It hasn't happened yet, but in the end, it's all intelligence, so businesspeople view it as one thing," observes Gartner analyst Ted Friedman.

One area in which the two worlds are colliding is in text mining, which covers a number of techniques for analyzing documents. Supporting technologies can identify and apply metatags to references to people, organizations, locations or even facts or events buried in the text of electronic documents, news articles, e-mail messages, Web pages or paper documents that have been scanned and turned into computer-readable text. The results can then be dissected and better understood through text analytics or popular BI tools.

How is text mining put to use? In one example, the NASD (formerly known as the National Association of Securities Dealers), the body that writes rules governing much of the financial securities industry, is using text mining to monitor member activity and ensure compliance. NASD monitors all trading on the Nasdaq and other financial markets worldwide, but data alone isn't enough. To better understand trading activity in the context of company and industry news, NASD developed SONAR, an application that analyzes trade data as well as news announcements, SEC filings and other textual documents using text mining software from ClearForest. The goal is to detect insider trading and other illicit activity.

Did text mining help uncover insider trading at Imclone and conflicts of interest among analysts and executives touting stocks while unloading the very same shares? NASD declines to discuss its use of text mining, but the SONAR application described on the organization's Web site would seem to be built for the task. Click here to see Intelligent Enterprise's findings on the current breadth of analytics and text mining deployments among enterprises.

One ClearForest customer that does talk about text mining is EDS. The systems integrator has been using the technology since 2001 as part of its "Bank of Knowledge" purchasing application. With more than 9,000 corporate customers, EDS buys servers, PCs, networking gear, software and services at volume discounts, but coordinating purchasing across offices in 65 countries and tens of thousands of suppliers was understandably difficult. Bank of Knowledge started as a BI initiative, but EDS soon turned to text mining to analyze purchasing contracts, investigate adherence to terms and determine best-possible sources depending on volumes, deadlines and delivery logistics.

EDS's main problem was interpreting all the content in its more than 35,000 active supply contracts. "Each contract is typically 40 to 60 pages, so it's just not possible to read every contract and apply that insight to buying activities in a reasonable timeframe," says Kas Kasravi, whose formal title is EDS Fellow.

The company started with high-value contracts (such as enterprise software) that offered the biggest potential for savings. Some contracts were available electronically while others were scanned and converted to searchable PDF files. Linguistic rules were then developed to guide ClearForest's software to look for word patterns identifying items, terms, prices, contact information and other essential contractual details.

Analysis is done when, say, a vendor notifies EDS that it's raising prices. If a contract specifies fixed pricing for three years, text mining quickly ferrets out the clause so it can be enforced by purchasing agents, saving the company money. When an EDS customer orders telephones or desktop PCs, text mining determines the best source, examining variables such as supplier location, past performance, product availability, discounts, order volume, margins and contract termination clauses.

EDS now applies text mining to thousands of contracts, and it says it saves an average of $2,000 per year per contract by enforcing terms. In addition, the productivity of the purchasing staff has improved more than 12 percent because they're spending less time reading contracts, searching for relevant clauses and relating that information to pending orders.

Vendors including Inxight and Attensity have joined ClearForest in attempting to move text mining beyond the confines of niche areas such pharmaceutical research and government intelligence. Contract management is one such application, and others include spend analysis, patent filings and research, and early warning on warranty and quality control problems.

Integrate All Forms of Information

EII is the latest buzzword associated with database integration technologies variously known as "heterogeneous distributed database," "virtual centralized database," "federated database" and "enterprise data access." Gartner analyst Ted Freidman views EII as a goal rather than a technology, with the idea being to integrate all data assets in order to deliver timely and complete views of business and customers, and to provide data consistency and cross-platform and cross-database access.

TAKE ACTION
• Bridge systems and close disconnects: Do customer or internal processes require access to multiple systems and paper-based records? Business process management and enterprise information integration can bridge islands of data, content and automation.

• Eliminate human interaction: Are transactions bogged down by routine reviews and approvals? Integrate key data, set rules for exceptions and automate everything else.

• Don't read mountains of information: Coping with thousands of test reports, contracts, warranty claims, e-mail messages or shreds of textual evidence? You'll never read through it all, so consider text mining to extract knowledge and correlate it to related data.

• Cut integration time, cost: APIs and custom integrations take months and megabucks to develop and inevitably break when you upgrade software. EII promises repeatable integrations that take weeks not months, but the category is immature, and not all products can handle content.
A number of vendors have been adding integration capabilities for content. IBM recently acquired Venetica and merged its content integration middleware into its own DB2 Information Integrator product suite. Other EII vendors, including Meta Matrix, Actuate, Journee, Avaki, Ipedo and Snapbridge, also offer varying degrees of content integration, but IBM's move brings credibility to what had been a fledgling trend.

Toby Redshaw, chief technology officer at Motorola, says EII is particularly useful for companies integrating acquired companies. "You find that you have valuable data, but the problem is gaining access and sharing that information throughout the organization," Redshaw explains. "Everybody has silos of data that can be used effectively within those silos, but the problems and the access needs are horizontal."

Building a service-oriented architecture and using EII middleware from Meta Matrix, Motorola is gaining easier access to a variety of data. In one example, the company is trying to give customers and partners visibility into its supply chain. "The repair and return shops and call centers all have good vertical data, but now we're looking at horizontal issues, and we needed a tool that digs into those pockets and normalizes the information."

Redshaw says the idea of "unstructured data" is relative, describing information as a continuum from extremely structured, clearly defined data (as in a database), to XML documents somewhere in the middle and to content such as images that don't have much structure at all.

By relying on EII software, Motorola was able to provide information on order status throughout the supply chain in nine weeks, about a third of the time it would have taken using traditional methods such as custom, API-level integration.

Put Convergence into Play

Are BPM, text mining and EII ready for mainstream deployment, or should the risk averse continue to sit on the sidelines? The answer varies by technology and application.

BPM is a maturing market overall, but less so when it comes to letting companies flexibly and deeply tap into both data and content, says Mike Maziarka, an analyst at InfoTrends/CapVentures.

Convergence "is starting to gain traction in the accounts payable and accounts receivable area, where BPM can tap into ERP and help automate the matching of what's been billed to what's been paid," Maziarka says. "Other areas where [convergence] has big opportunities include financial applications and customer support."

If your customer and partner service problems send CSRs into disparate data and content stores and systems, follow ANICO's example and consider a process-based approach to creating a unified view of the customer. If other processes are bogged down in rubber-stamp interactions with content, weigh the cost of those inefficiencies against an investment in BPM, which for large companies is likely to start at $300,000. The more repeatable the process (and the more costly it is without automation), the more BPM makes sense. For many public companies, regulatory compliance is introducing yet another incentive for considering BPM (see "The Silver Lining in SOX").

As for text mining, EDS was an early adopter back in 2002, but EDS's Kasravi says the technology is poised for mainstream use. "Businesses large and small have to deal with reading large amounts of textual content in order to know what to do or find opportunities," he says. "Get out of the mindset that you have to read and process that information in people's heads."

E-mail routing, competitive analysis, investment analysis, news analysis, fraud detection and product liability are all areas in which text mining will flourish, says Kasravi. ClearForest puts today's typical text mining investments at $300,000 to $600,000, but broader adoption will help drive costs downward.

Compliance matters such as the Transportation Reliability Enhancement, Accountability, and Documentation (TREAD) Act (passed in the aftermath of the Ford Explorer/Firestone tire recall) and Financial Accounting Standards Board (FASB) issues will also compel companies to consider text-mining technologies. "Product liability and warranty costs are going to increase, and text mining can help provide early warning of product deficiencies," says Kasravi.

ClearForest recently partnered to develop a text-analytics-driven warranty claims application that relies on integration adapters provided by Information Builders' iWay subsidiary to access the application automotive dealers use to enter warranty information. The application is designed to integrate content and data to better analyze warranty costs related to parts, assembly problems and labor.

EII is the least developed of the three technologies discussed in this article. Among the pioneers noted here, Motorola may not have as much company as ANICO, Hasbro, NASD or EDS, but service-oriented architecture and tools such as EII are the clear direction for all enterprises. "None of us can do wholesale rip and replace anymore because the days of the megaprojects are over," says Motorola's Toby Redshaw. "Web services and loose integration allow you to harvest what you have."

MATURITY METRICS: Data and Content Convergence
Technology
Business process management (BPM) is the most mature of the three technologies discussed here in terms of its ability to harness both data and content. Text mining is proven as a tool for interpreting content and correlating results to data, but six-figure costs have limited deployment. Enterprise information integration (EII) is an emerging software category.

Demand
Many processes involve both data and content, and ambidextrous BPM is filling a need, particularly in loan/claim, accounts payable/receivable, CRM and compliance-related financial management processes. Text mining remains concentrated in the biotech and intelligence realms, with six-figure investments limiting interest. Most EII initiatives remain focused exclusively on data.

Market
Many technology buyers remain Balkanized in their respective data and content mindsets, but higher-level SOA, process automation and comprehensive intelligence initiatives will force detente. Text mining opportunities will emerge in e-mail routing, competitive analysis, investment analysis, news analysis, fraud detection and warranty/quality control applications. Repetitive process and integration challenges will demand the agility and reusability of BPM and EII solutions.

Final Analysis
Immature in the short term, but XML, Web services and service-oriented architecture (SOA) are fast easing access to all forms of information. Proven applications and incentives including compliance and competitive advantage will help punch holes in the silos and eventually erode the boundaries between data and content.

analyses apply strictly in the context of data and content convergence, not broadly to bpm, eii and text mining.



FIELD REPORT    Horizon Casualty, Newark, NJ
Process automation eliminates customized
workflows, reduces errors and saves time and money

Implementing BPM has helped an insurance company automate routine decisions while tapping content to clear up exception transactions. At Newark-based Horizon Casualty, a 65-employee workers compensation subsidiary of New Jersey's Horizon Healthcare Services, claims and related bill payment processes required access to policy data, rules on coverage, claim forms and associated data on each claim. Horizon processes roughly 150,000 medical bills per year for clients including its BlueCross/BlueShield-affiliated parent company, the State of New Jersey and The Hartford insurance company, yet it had "five different ways of doing the same thing," according to John Oliveira, director, marketing and operations.

Processes varied depending on whether bills were related to workers comp claims or auto insurance policies, and all transactions required the assistance of medical payment specialists. These specialists were dedicated to specific types of transactions and were responsible for adjudication-the coding step that determines what is and what isn't covered.

From Oliveira's perspective, the underlying work steps were essentially the same. "You get a bill, you evaluate it and you post it for payment," he explains, "yet we had custom workflows and a lot of variation. We had six people processing bills, and we could get six different results on the same bill."

In 2002, Horizon embarked on a BPM initiative that has put in place a consistent core process with various options tailored to specific clients. Adjudication decisions are now determined by business rules wherever possible, and the human intervention is reserved for exception transactions.

Horizon has fully automated at least 60 percent of the more than 35,000 claims it receives each year via EDI using Rules Power BPM software. Roughly 90,000 paper-based claims are still scanned at Horizon and images transmitted to a service bureau for overnight data entry, but the data returned feeds a streamlined process that has cut 10-day to two-week processing backlogs down to two to three hours. Straight-through processing rates aren't as high as those achieved on EDI-based transactions, but the BPM software gives payment specialists a complete rundown on the missing and out-of-tolerance data so they can access databases, claims images and other sources to plug-in or edit the appropriate information.

The software for the two-year project cost about $100,000, according to Oliveira. The next phase will tackle complex automotive personal injury protection claims, which are replete with rules and analytics aimed at uncovering fraud.

Horizon has far outstripped its original goal of lowering processing costs by 10 percent and automating at least 20 percent of transactions. "We've cut our payment specialist staff in half, yet we're handling the same volume of claims and we're prepared to add several new customers and significant increases in volume in 2005," Oliveira says. —D.H.

FIELD REPORT    Zelle Hofmann, Minneapolis
Content usually illuminates data, but the opposite can
also apply, with data pointing to better use of documents

The key to efficient content management is reusing chunks of existing information. Minneapolis law firm Zelle, Hofmann, Voelbel, Mason & Gette is pursuing this principle, using a business intelligence (BI) tool to search old casework that might save lawyers time and clients money while possibly changing the outcome of current legal cases.

Like most law firms, Zelle Hofmann deals with thousands of documents every year, and the firm's 180 attorneys and six offices nationwide rely on a document management system to store, access and retrieve more than 800,000 matter-related files. In 2002, the firm upgraded to Hummingbird Enterprise, an enterprise content management (ECM) system, but it also stumbled upon Hummingbird's BI Query tool, which was included as a reporting tool.

"BI wasn't a part of our original plan, but our firm has more than 60 partners, and they're all interested in the financial status of the firm," says Warren Knowles, technology implementation manager. "We've used the software to develop better and more flexible financial reports."

Hummingbird BI lets attorneys review standard reports or select their own criteria and develop custom reports without the aid of IT or accounting staff. The tool also cut costs: More than 200 accounting reports were made available online, with e-mail alerts replacing physical printing and shipment of 20 to 30 reports per day-a time-saving move that has eliminated the equivalent of more than 50 full-time days of labor per year.

Once the IT staff became familiar with Hummingbird BI, they quickly spotted new applications. In one example, a report was developed on the internal use of West KM, a knowledge management tool from Thomson that can scour the firm's own content repository for related documents whenever an attorney conducts a search in the publisher's popular Westlaw legal research database. The BI report revealed that West KM is returning some 1,400 relevant hits per month, a good return on a service that costs the firm more than $8,000 per month, according to Knowles, but the project also led to a bigger idea.

"We realized that if we can use BI to analyze patterns of content usage, we can make better use of our knowledge," says Knowles. "If attorneys are constantly referring back to old [cases], we can point to related documents that can provide a baseline for new cases."

Zelle Hofmann attorneys hold meetings to trade ideas on cases in progress, but people retire, change firms, take leave or are too busy to put much effort into sharing information. The challenge in exploiting BI for KM is devising useful reports. "When is a pattern measurable and useful?" asks Knowles. "Is it when a document has been referenced five times in one month, or is it whenever old content is used?," says Knowles. "The main push is that we want to use our content in a way that is valuable to the client."—D.H.

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