Appian Anywhere SaaS Case Study

April 19, 2009

As many of you know, I have been pressing the metal to the floor on BPM in the cloud. So, I was interested to see the Appian Webinar last week (available on demand here). Some of you will remember that I developed a good chunk of process training for them to support users on the Appian Anywhere platform.

The session opened with the usual intro (not from me for once), pointing to all the usual reasons for doing BPM – efficiency, retain customers, compliance, etc. However, I was impatient to get to the SaaS opportunity, as I believe BPM delivered in the cloud enables a whole range of new possibilities.

Following the vendor neutral intro from Information Week, Samir Gulati Appian’s VP of Marketing, talked about their offering. Appian Anywhere has the same code based as the Appian Enterprise product, but deployed in the cloud and available on demand. AA has been out there for nearly 18 months or so (although I think it was only officially released earlier this year). It’s available in the Premium Edition where you get your dedicated server, SAS-70 type 2 application, etc., and the Standard Edition where you get shared (multi-tenant) access to an Amazon EC2-based service. From a pricing point of view, the Standard Edition is $35 per user per month. And while you are in evaluation mode, Appian provide a “Process Coach” to help get you up and running.

Samir talked about a few example customers of Appian Anywhere: ManuLife, who are using it to support their marketing function, driving better resource usage, managing interfaces to their third party suppliers, etc. The second example was Starbucks who are using AA to manage and track localised promotions, enabling visibility into what is going on.

The main part of the webinar was a case study delivered by John Cowles, Director of Operational Efficiency at Clayton Holdings. They are primarily involved in Credit Risk and Due Diligence work for the Mortgage industry (they don’t own assets, just provide services to others). Their customers are the Banks and Mortgage issuers. They could see the financial industry going in a downward spiral, and felt that things would get tighter. They realized that they needed to get better control of their own processes, and start monitoring/managing process performance. They also felt it was taking too long to get people up and running effectively.

Being a smaller company, they were a little nervous about getting into the BPM space, so thought they would try out the SaaS option. For them, it was a low risk; a low cost way to get started (John’s estimate was that it was only about 10-20% of the cost associated with buying a BPMS and installing in-house). And with limited IT availability, they felt the SaaS option represented the best way forward. They started zeroing in on Appian because they had the SaaS capability (at the time they were the only one out there with an On Demand offering). He liked their tenacity and the flexibility of the tool.

Once their instance was set up, it took just 6 weeks to get their first process up and running. He started developing a baseline of their current operation (always a sensible move). In his words, “you can’t improve anything unless you know where you are started. You could be wasting your time focusing on the wrong things.” Overall, he was looking for a 30% improvement in efficiency, while also seeking to reduce the variability in the way work was carried out. They followed a DMAIC approach, but it was a BPM project (not 6Σ). They were lucky in that they had the active involvement of a lot of senior business people (Executive Steering Group). Yet, their development and implementation team was small (2 people).

They have been doing a new release every month once they got their initial processes up and going. And ever since that first release, the business people themselves have developed more and more ideas on what they want to do. Initially, they actively avoided doing any integration at all. So it has only been very recently that they needed to involve IT.

I am not sure, but I think they are now addressing two areas of the business. John talked of having over 30 processes, with a lot of interdependencies between those processes; so I am guessing he was referring to the various sub-processes and chained processes that support the domain. 

From a results point of view – they are now doing more with less. He cited a new operation in a remote city where they had thought they would need 14 people to do a particular role, now they get by with just three.

For a case study, I thought it was a good one. It was good to hear someone really getting into the lessons learnt.

  • John quite rightly pointed to the need to “Focus on Change Management and Process Management early on … We had to prioritize, needed to step back and look at the bigger picture.” I found myself thinking that we could have had some interesting discussion over the Process Portfolio Management techniques that we have been working on with a Center for BPM Partner.
  • His second point was I think a good one “Limited or no system integration in the first release” … indeed, they left the integration till nearly 6 months before they got into that.
  • “Prototype everything” … sit down, work with them in design mode, and see what that looks like, prototyping all the time.

There were others, but those were the things that stood out for me. John also talked to the need for Process Visibility … “Need to step back and look at the metrics at a high level and then focus down on the critical areas … treat it like a compass.” I liked that last phrase as it gives a sense of what Process Visibility should really mean to managers.

As a BPM Case Study, I thought the session was a good one. However, I think it would have been even better if he had covered the game-changing capabilities of a SaaS delivered BPM solution in support of the process across the wider value chain. I think many managers are still stuck in the mode of optimizing their own processes rather than looking for the opportunities to support the wider problem. It’s a bit like stove pipes inside an organisation … but here, I am getting at the opportunities to radically improve the value chain, through the comprehensive integration of all the actors involved. Having said that, I am sure John is already thinking about the opportunities to deliver this sort innovation.

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PegaWorld Keynote – Mhayse Samalya – President of Farmers Insurance

October 21, 2008

Update – you can view the Keynote itself here (requires registration).

This division of Farmers deals in the small business insurance market – a $95B market. When Mhayse joined Farmers, they had just 2% of that market. He saw it as an incredible opportunity – where 47% of business in the small commercial insurance sector, are with small business insurers. The question is why these small players succeed against a big player – it’s because they know their local community, they are part of it and know how to communicate with their customers.

Mhayse described his approach that really started with a clear Vision … He set out with objective of becoming #1 in their industry, and then laid out a strategy of how to get there.

The vision was to:

  • Excel at the core
  • Build deeper expertise
  • Leverage predictive modeling
  • Expand the appetite and sophistication of the organization,
  • Create a targeted set of offerings for agents and their customers.

Only then did they start to think about how you deal with the small business opportunity and the efficiency end of things. Sure you need an efficient way of doing the business, but the primary focus of that vision was on growth and the customer experience.

He went on “You cannot expand the appetite for more … unless you can automate the way in which the business operates. I didn’t know what I was searching for – but I was looking for something that would help us … something that would give us a clear line of sight to the solution to the business problem. I had to understand what it was going to feel like. However we get there, we had to create the right sort of agent experience … we had to get them (agents) fully engaged to get the benefits of the gem we had in our hand. How do we reap the benefits … it has to be done in increments. I wanted to know where the short term goals and pointers were (pointers that would indicate we were being successful). Trying to get there all at once is probably going to end in disappointment. We had to do a set of projects, and do them quickly, while being flexible along the way.”

At this point I was really engaged … I hadn’t heard a business leader at this level talk about a BPM project in such an impassioned way. This was his project, and he had been driving it top down. Now I started recording the slides and some of the related phrases:

Create the right agent experience – we had to demystify that experience so that it really helps the agent – pre-filling information into forms and easing the user experience.

  • Eliminate the useless questions and options
  • Automated underwriting decisions
  • Automated pricing … it used to take us far too long to price a policy.
  • We had to increase the pass through rate … the time to get a bound policy.
  • We were looking at (touching) 80% of the business that was passing through, and were closing just 20%. That should have been precisely the other way around.
  • The question was how could we enable the local agent to be local in terms of how they work.

Focus first on Agent expansion and New Business Growth

  • First support environment was delivered in 5 months.
  • Restaurant product went countrywide in July 2007
  • Rolled out the Auto policy facility in Oct 07
  • And getting an “umbrella” policy available as an add on in June 2008

The results:

  • 14 days to 14 minutes
  • Close rate was up 5%
  • New business was up 70% “do you want Fries with that”.
  • Renewals up 60%
  • Added over 1000 new agents (later updated in the flow of conversation to 1500 new agents).

We focused secondly on efficiency … not how many people we could chop out

  • Endorsements
  • Renewals …
  • Focus on the desired business result
  • Eliminate all the non Value Add steps, take out the noise and red tape.

Put the business change in the hands of the business

  • Pulling together cross functional teams
  • Finger pointing is the wrong way to go …
  • Rapidly iterate
  • We don’t always know exactly what we want
  • We are sometimes representing other folks … like the agents that work for us
  • Test, monitor and respond quickly.

Building the right team is critical

  • Empowered … someone who is on my team that was also part of the IT organisation
  • Dedicated cross functional teams – jammed them together, locked them in a room and told them they couldn’t come out.
  • Wanted to have a partner with skin in the game. Developed a Customer Intimate relationship with Pega. Their compensation was linked to the delivery of our results. Now we really are on the same page.
  • Get participation and engagement – with the agents.

Farmers had gone from low on the food chain … to the fastest growing at Farmers, the most profitable at Farmers, acquiring over 1500 new agents. They acquired a business along the way and have now grown to around $3B, representing 3% of the available business out there. Tied for first place.

Questions – How do you change the culture? At the end of the day it comes down to individuals. The traditional solutions were not going to get us to where we wanted to go. We have 1000s of people and unless you start to align the objectives, their compensation, etc. then you will have problems.

There has to be a common and shared vision – one that get both business and IT people excited. Too often there is an assumption in the business mindset that IT folks don’t have that sort of vision – that they don’t respond to the challenge. Point was that with the BPM program (still ongoing) they had proved that wasn’t true.

The key point for me was that he focused first on the Customer Experience. They had a strong visionary leader who publicly aligned himself with the overall success of the program. Theydrove partnership and engagement through cross-functional teams to achieve results The business results speak for themselves.

I just hope that Pega and Farmers agree to put the video up on the web so that we can point others to this powerful case study.Its one that every COO and CEO should see.