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Open Source Architecture for Building BPM Solution - Part 1

[This article talks about how a custom BPM solution can be build using available open source BPM tools like Activiti or jBPM] Business Case: A MFI is looking to automate its processes. It has basic functions called loan origination and loan servicing Loan origination includes following steps a) Borrower risk analysis b) Borrower on-boarding where as loan servicing includes a) Disbursements b) Collection c) Closer d) Loan extension etc. Other than these two functions MFI also have operations team which takes care ground level activities like physical transportation of cash and documents, deployment of agents, identification of loan potential areas. So how can we build solution which is scalable and minimal cost for this MFI? Below is one of many solutions Step 1: High Level Architecture Design Step 2: Process Discovery and Implementing the Executable processes Lets restrict ourselves to only loan servicing – disbursements of funds. And see how we can fit that in ...

Competitive Analysis BPM Products

Process Reengineering and Optimization Tools – Part 2

Seven Principles of Re engineering ("Michael Hammer") Organize around outcomes, not task : This principle says people should be organized around outcome rather than task. Michael Hammer gives example of case manager who handles end-to-end process and is accountable for it. We can associate this to a production line. Production line is like a single process, where as works working around it are completing a single task each. Problem with task approach is, if one single worker doesn't work as expected or makes mistake, not only process output is defected but also makes the task of other resources redundant. Organized around tasks 1st Principle Have those who use the output of process perform the process :This is essential as at each step of passing on information we are losing both information, time and resource. 2nd Principle Subsume information-processing work into the real work that produces the information: Essentially it says don't jus...

Process Reengineering and Optimization Tools – Part 1

Processes are ever evolving. They keep changing to suit business and their goals. As an analyst weneed to keep finding ways to improve it, make it more relevant and optimal. Business process management only talks about lifecycle of a process, it doesn’t gives us tools to optimize. There are very few tools that help an analyst to think in a structural fashion. One such tool is “Lean”. Lean essentially talks about reducing waste and in turn make a process more efficient and optimal. Lean is specifically very relevant for process optimization as it talks about flow of process. Although it was first applied in manufacturing, but we as an analyst can take a lot of clues from it, to optimize process in any sector. Toyota, which was pioneer in Lean manufacturing, talks about three kinds of wastes. Muri – Related to design of process, it talks about what we can proactively avoid while designing the process. Mura – Related to implementation of process and elimination of fluctuatio...

Predictive Model (Using Trend Analysis, Univariate Analysis and Binomial Logistic Regression)

Predictive models have been in use since advent of various statistical tools. Both marketing and financial institution uses it extensively. This article tries to look under the hood how a predictive model is created. I will try explaining it using simplest available statistical tool like Trend analysis , Univariate Analysis and slightly complex tool called Binomial Logistic Regression . Lets assume company want to know how much attrition will happen in current quarter, so that it can start hiring process. First step of model is find out what are the factors that can lead to attrition of an employee. To find these factors we simple take past data and holistic list of factors. Age, Income, Martial Status, Education Background, Work Rating, Number of leaves, Number of days came later than usual timing, Number of year in company, Business Unit, Business vertical, Past Work experience Indicative list of factors for Company Attrition Model On each list...

$10 Billion IPO, Facebook

Facebook announced today about its intention to float $10 Billion IPO. Only 10 times there has been an IPO of more than $10 billion. The biggest IPO by an Internet based company was from Google, that was less than $2 billion. So how is Facebook so different from others? Its revenue almost doubled from last year and in current fiscal year its projected revenue is $4 Billion. There are two moot question about Facebook IPO 1) Is $100 billion valuation correct? 2) What Facebook plans to do with $10 Billion? IPO generally is backed by a need of financing some project or need of expansion. It is unclear why Facebook needs so much of money. About valuation, its difficult to imagine a $100 billion internet company, whose core competency is to help people connect. Yes it has more than 500 million users who log-in daily. But does that makes it so much valuable. Its earnings has been very small until recent years. Even if we use very optimistic approach and say Facebook ad...