Business process management (BPM) is a technology that can reduce a company's automation costs and aid in regulatory compliance, but according to one industry analyst, "most of the industry is not doing anything" to implement it.
Speaking at the LOMA Emerging Technology Conference held here recently, Craig LeClair, senior analyst, information management, for Cambridge, Mass.-based Forrester Research, Inc., said that 58% of insurers polled by the researcher reported that they would not buy BPM technology. Just 11% of insurers said they would make a first purchase of BPM, while the remainder plan on upgrades.
Despite those numbers, however, "BPM is on a steady growth curve in terms of purchases [overall]," he added, noting that "2006 BPM implementation in the insurance industry aligns strongly with the total market."
Generically, BPM is a technology platform that provides a systematic approach to improving an organization's business processes in order to make them more efficient and improve the bottom line. According to LeClair, BPM provides flexibility for process and rules modification; cost reductions; help in documenting compliance, and legacy systems renewal (by serving as an integration platform).
As applied to insurance, BPM begins with designing a front end function where companies can build workflow processes, establish business rules, and do simulation and testing, said LeClair. Next, platform users need to execute the processes using workflow engine software to control how that happens.
That is followed by monitoring and managing the processes with real-time reporting, he explained. Finally, users can analyze and optimize their processes, leveraging dashboards, further simulation and historical analytics to fine tune.
While BPM holds much promise, it does have some weaknesses, said LeClair. He pointed out that few BPM platforms have "insurance-specific assets" or templates for common insurance processes. In addition, insurers and vendors do not know where BPM should and should not be used, he noted.
