As Chubb and others have learned, business-process management requires strategic innovation— not just cost-cutting.

Although business-process management has some distance to go before reaching maturity, it's already scoring important victories not only in cost-cutting, but in business innovation. The insurance industry, for instance, is rapidly adopting holistic BPM solutions, outpacing other financial-services firms such as banks and brokerages, according to TowerGroup.

Todd Ellis, CIO of Chubb Commercial Insurance (CCI), the largest operational division of Warren, N.J.-based Chubb Group, says BPM helps "drive greater discipline and awareness" to define the company's operational, business-delivery, and business-architecture models 
 
In May 2006, Chubb went live with its Commercial Underwriting Workstation (CUW), a homegrown portal that integrates with commercial BPM software from Metastorm. The goal was to preserve underwriting and agency management at the local level while centralizing and streamlining the company's rate-book issue (RBI) process by which premiums are determined. Where CCI used to have multiple, local RBI processes corresponding to its 40-plus field branches, it now has one standardized process, and its formerly disparate service force will soon be condensed into three service centers.

The initiative's success "positions us to have greater cost transparency, deliver greater quality and higher degrees of throughput, and track down bottlenecks in our processing life cycle," Ellis says. Ultimately, he hopes that will help reduce delivery costs, improve quality, and boost efficiency. 

From Frugality to Opportunity

Chubb's BPM effort marks an advance in the understanding of BPM for the insurance enterprise, says Laura Mooney, senior director of corporate and product marketing at Metastorm. She notes that BPM projects are increasingly less motivated by cost anxiety than by a desire to make the business more innovative and agile. As Mooney sees it, BPM's power to analyze, decompose, and re-engineer processes is ultimately an indispensable part of business and technology architecture. In that respect, "BPM is emerging as a kind of business parallel to service-oriented architecture," she says. "If you just implement service components without tying them back to core business processes—which is where BPM comes in—there's a disconnect between IT and the business."

As such, BPM can help SOA gain traction, according to John Buten, director of product marketing at Pegasystems. "BPM can build services-oriented business applications that bind together many services into a process," he says.

On its own terms, BPM has the power to increase efficiency tremendously, Buten insists. But it also is "only as good as its best businesspeople," he says. "The success of BPM is bound by the limits of intelligence and process insight within a company; getting that intelligence and process out of your systems and your organization is a very human process—and a very humbling one."

Bearing that in mind, Buten recommends moving toward a BPM culture gradually by beginning to automate and manage existing processes, and developing the insights gained through that endeavor, in order to reduce risk

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