BPM: A PRACTICAL WAY TO IMPROVE BUSINESS PROCESSES

White Paper
Atos Origins vision on Business Process Management

content
ExEcutivE summary BPm: oPtimal, flExiBlE and transParEnt oPErations BusinEss ProcEss managEmEnt in PracticE BPm in rElation to othEr mEthodologiEs imPact of BPm on thE organization BPm roadmaP: think Big, start small, scalE quickly BPm suitEs and suPPliErs atos origins BPm sErvicEs
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executive summary
The term business process management (BPM) unites developments in areas such as workflow management, application integration and process redesign, which used to be regarded as separate. This uniting and todays technological possibilities for implementing BPM provide organizations with new opportunities that were not available with the individual forerunners of BPM: > optimization of business processes; > flexibility when changing business processes; > improving the transparency of operations. BPM enables operations to focus on customers by centralizing business processes independently of an organizations existing departmental structure. BPM describes business processes in models and executes the processes on the basis of these models. This allows the execution of processes to be measured. Comparing the results with predefined norms reveals how they can be optimized. As processes are executed automatically and precisely according to the model, it becomes easier to report on the compliance with a variety of regulations. BPM forms an ideal combination with a service oriented architecture (SOA), the standardization and reuse of services and processes creating economies of scale and greater flexibility. New process chains can be easily created by linking and integrating existing processes. The use of services allows the underlying applications to be decoupled from the business processes, so that modifications to these processes do not necessarily entail changes to the corresponding applications. The implementation of BPM has implications for the way an organization conducts business operations, as well as for its IT. This means it requires a BPM roadmap specifically prepared for the organization and based on company strategy and maturity, incorporating the consequences for the organization and a change management approach. Although the market for BPM systems and their suppliers is consolidating, the fields historical background, which has given rise to a variety of IT platforms, means that two such systems might not be comparable. Atos Origin is knowledgeable concerning the leading suppliers in all segments of the market and has formed a partnership with each of them. Atos Origin supplies a full range of BPM services, from strategy definition and execution, to management and operations. It can support organizations with: > restructuring the business along process lines; > designing, modelling, improving and implementing processes; > designing, creating and managing an IT landscape oriented towards processes and services.

BPm: oPtimal, flexiBile and transParent oPerations

In todays world, a variety of stakeholders place high demands on companies and other organizations. > Customers expect integrated services so that they do not have to endure being sent from one department to another, can receive quick and clear assistance from whatever channel they request it, and can obtain information on the status of their orders and service requests whenever they want it (business optimization). > International competition means constant attention to profitability, sales and costs (business optimization). > The market demands that organizations are able to quickly launch new products and services, penetrate markets and form and dissolve alliances (business flexibility). > Government bodies and supervisory authorities require transparency of operations and compliance with national and international regulations (business transparency). BPM helps companies and other organizations overcome these complex challenges. > BPM integrates operations through the implementation of customer-to-customer business processes that cross the boundaries of business units and departments (process chains). As a result, BPM smoothes and speeds up the transition from a product-centric to a customer-centric service provision. > BPM makes the business processes explicit, defines them in models and automates their execution based on these models. By continuously measuring and analysing the metrics of a process, it can be optimized, resulting in reduced costs, throughput times and stock levels, as well as better services to customers. The computerization of routine business processes leads to lower costs and fewer errors. > By utilizing the insights that BPM provides into business processes, they can be standardized, allowing their use in multiple situations. Not only does this produce economies of scale, and hence cost savings, but also opportunities for creating new processes based on existing standardized ones. > Thanks to BPM tooling, the hardcoded business processes can be extracted from the legacy applications, making it possible to change business processes or create new ones without having to modify the corresponding IT platforms. > By describing processes explicitly in a BPM system, it becomes considerably easier to submit official reports to those bodies that monitor compliance with legislation and agreements. BPM ensures a high degree of transparency for operations, thus simplifying accountability. Figure 1 shows that the initial benefits provided by BPM are in the form of cost savings the low-hanging fruit and that more time, experience with BPM and maturity on the part of the organization are needed before the flexibility benefits can be realized. As these benefits result in strategic advantages, their added value is actually the greatest in the long run.

BPM Implementation

Value

Improved agility

Increased revenue Decreased costs Original profit Time

Figure 1 BPM business benefits (source: bpmbasics.com)

Business Process management in Practice

Gartner defines BPM as a management practice that provides for governance of a businesss process environment toward the goal of improving agility and operational performance. But what does this abstract definition really mean? This section sets out BPM based on the BPM approach outlined in the previous section for overcoming the challenges that complex organizations face. The relationship between the various BPM applications is clarified by presenting all the applications in a single model, based on the splitting out of strategic, tactical and operational applications. tomers can use different media for communicating with the organization concerning the process: post, email, web or phone. To fully digitize the process, the required information is translated as necessary into an electronic form. Business services can also be supplied as web services to the organizations partners in the business chain.

continuous ProcEss imProvEmEnt BasEd on hard figurEs

Explicit definitions and models of business processes, in a standardized language like BPMN1, are the core of BPM. The models are executed by the process engine, a software module that invokes IT system services or requests human intervention for the execution of each process step. As the management of a process is fully computerized, the values of various process metrics can be obtained (business activity monitoring): execution times of process steps, workload at certain points in the process, number of error situations, etc.
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customEr-cEntric oPErations through ProcEss oriEntation

With BPM, the services provided to customers and the business processes for realizing these services are centralized and placed under the responsibility of process owners. Each process is separated from the activities - computerized and manual alike - of the organizations business units and departments. If a business process can be implemented in a generic from, cus-

Business Process Modelling Notation is a standard of the Open Management Group (www.omg.org).

Strategic Customer
+

Customer

Tactical Operational

Department

Department

Department

Operational

Figure 2 BPM applications at different levels

Figure 3 BPM places customer-to-customer processes centre stage

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Based on this process intelligence, an operations manager can perform adjustments to a process by: > deploying extra resources for the execution of manual steps in the process; and > initiating action for exceptional situations that the process concerned cannot handle. (An example could be failing to resolve a customers complaint within the allotted time.) Process intelligence is also analysed as a way of assessing the process itself and identifying possible improvements (such as performing two controls in parallel and, hence, shortening the execution time of a delivery process.)

BusinEss ProcEssEs as sourcE of managEmEnt information

Process intelligence is an excellent source of standardized management information. This no longer has to be compiled using complex consolidations of extracts from databases, but can be derived directly from the execution of business processes. Management not only receives strategic reports based on information that becomes available, but can also define in advance the key performance indicators (KPIs) necessary for validating and monitoring these processes. Accordingly, BPM is a mechanism that generates quantitative data from business processes. This data is used to flesh out management strategies such as Lean and Six Sigma, of which continuous process improvement is a key component. As well as reports for senior management, process intelligence is a source for the reports required in connection with the compliance with a raft of regulations. Since the execution of the business processes has full computerized support and adheres strictly to the process design model, this information provides the maximum possible transparency for business operations.

Strategic Monitor Model Design Validation Tactical Execution

+

Analysis

KPI KPI

Reports

Validation Tactical

Analysis

Operational

Figure 4 Continuous improvement of processes

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Figure 5 Reporting based on process intelligence

i think its like thAt

But this is whAt hAPPens in PrActice...

BAsed On the interviews And AssuMPtiOns, yOuve gOt tO dO it this wAy!

why? i tOtAlly disAgree!

thAts cOMPletely ridiculOus ?&^$%#(*&

BEst PracticE: ProcEss dEsign BasEd on ProcEss intElligEncE, not on assumPtions

The principle underlying the approach is that analysing and changing processes should be based on genuine, accurate data, and not on assumptions. In reality, many managers have no insight into the processes for which they are responsible, because information on these processes is difficult to obtain. The first step on the road to transparency is to implement the existing processes in the BPMS so that their metadata can be collected. This ensures that a correct picture will emerge of the processes in practice. This picture will often differ from the one expected and documented. Reality plays by its own rules, with bottlenecks and delays coming clearly into focus as a process advances. Following a number of improvement cycles, the process will have a design that allows it to execute more efficiently and rapidly than was previously thought possible.

Figure 6 Assumptions about processes are dangerous

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standardization of BusinEss ProcEssEs

If an organization uses BPM to any extent, an analysis of business processes and services will reveal that some processes and subprocesses can be standardized, allowing their use in multiple situations. For example, a process initially specific to a certain business partner can be made generic and put at the disposal of an entire market. Or the invoicing procedures can be removed from a number of product-specific delivery services and standardized. Not only does the above produce economies of scale, and hence cost savings, but also makes it possible to create new processes based on existing standardized ones. The standardization and reuse of processes and services also falls within the scope of an SOA.

flExiBility of ProcEssEs and it systEms

Another SOA aspect of BPM is the segregation of business processes from business logic. As stated above, the management of processes is provided by the process engine, whereas processes were often previously hardcoded in the algorithms of the business applications. Application functions are now in the form of standardized services invoked for the execution of process steps. This type of architecture provides the required flexibility, because firstly > the control exercised by the process engine can be changed without the need for modification of the underlying IT systems (for example, if the sequence of process steps changes), and secondly > the execution of a process step can be optimized without affecting the output of the process in question (for example, if a manually executed process step is computerized or the implementation of a service is optimized without the need for changes to the corresponding service contract).

Operational
+

Figure 7 Process management segregated from execution of process steps

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corE ElEmEnts of BPm

Broadly speaking, the core elements of BPM are: > customer-centric business operations through process orientation; > explicit descriptions of process flows in the form of models; > process intelligence used for measuring the KPIs of business operations; > management discipline to use process intelligence for continuously optimizing business processes; and > computerized support for the execution of business processes.

Strategic KPI Reports

Design Model

Validation

Analysis Monitor +

Tactical

Execution

Customer Operational

Customer

Department

Department

Department

Figure 8 The relationship between BPM applications at the strategic, tactical and operational levels
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BPm in relation to other methodologies

BPm: thE convErgEncE of Existing mEthodologiEs
Although BPM provides revolutionary opportunities, not everything about it is new. Almost all the advantages of BPM have been available under another name. The power of BPM therefore derives mainly from the convergence of business and IT disciplines that were previously approached in isolation from each other. These separate disciplines have converged in terms of the objectives they try to achieve, approach, supporting technology and management governance.

BPm as thE starting Point for nEw dEvEloPmEnts

Although BPM has its roots in the past, it provides opportunities for the application of innovations such as business rules management or real-time process simulations and analyses.

1 Process Centric Organization 6 Enterprise Content Management 2 Continuous Process Improvement

Business Process Management 3 Corporate Performance Management 4 Enterprise Application Integration

5 Work Flow Management

1. Making business operations process or customer centric, sometimes a spinoff from business process reengineering (BPR). 2. Process quality management methodologies such as Lean and Six Sigma for continuous process improvement. 3. Corporate performance management as a way of monitoring a companys strategy. 4. Enterprise application integration (EAI): computerization of the message streams between the applications that carry out the various parts of a business process. 5. Workflow management (WFM): the computerized support of operating processes, often in the form of document flows with staging posts at the people who carry out the process steps. 6. Enterprise content management (ECM): the digitization of business information and the management of electronic folders.

Figure 9 BPM, the convergence of different methodologies.

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how BPm and soa rEinforcE Each othEr

On page 8, SOA was mentioned in connection with certain features of BPM (standardization and reuse of processes, and the segregation of processes from applications). To understand how SOA and BPM reinforce each other, a proper understanding is needed of their differences and the realization of the objectives they are intended to support. > SOA is essentially a style of architecture, a method for building and implementing organizational and technical systems, characterized by design principles such as modularity, loose coupling and standardization. The principle idea behind SOA is the management of system complexity to raise the level of flexibility and adaptability2. In this context, BPM solutions seamlessly fit an SOA environment (see textbox below). > As explained in the previous section, BPM is a management approach or discipline focusing on the improvement of business processes (as regards their design, implementation and execution).

The BPM approach has a bias towards business objectives that are more tangible, such as shorter lead times, compliance with statutory requirements, improvements in the quality of business processes, and reductions in downtime. SOA reinforces BPM as regards the realization of flexibility. Without services as the future-proof elements of the business and IT landscapes, the flexibility of BPM can reach no further than changes in the control logic of business processes. Changes in the definitions of process steps by themselves lead immediately to changes in IT systems, because computerized process steps are linked directly to applications, technically as well as functionally3. In the absence of standardization and reuse of services and processes, BPM can lead to local suboptimization. BPM reinforces SOA through its focus on tangible business solutions. Two benefits of this are the prevention of SOA projects remaining IT exercises and the facilitation of business involvement in the defining of corporate services and the making of agreements on terminology.

... and BPM SOA > well-defined demarcation of processes by means of services; > enterprise architecture approach for broad-based governance > standardization on a single environment for process management, service management and integration; > risk of focus on short-term success in specific business processes; > very limited flexibility > without an enterprise architecture foundation, BPM is just another process silo;

and no BPM > difficult to interest the business; > risk of too much focus on technology; > few short-term business benefits;

No SOA

Figure 10 Benefits of a BPM-SOA combination

2 3

Service Oriented Architecture beyond the hype - Atos Origin vision on SOA (white paper), Huub Bakker et al., version 1.0, 20-11-2007. If an SOA is subsequently implemented as a result of defining a service for each process step, this will not produce a functional decoupling. Services are not the same as process steps!

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BPm, convErgEntiE van vErschillEndE BEstaandE ondErwErPEn

1. Proces of klant georinteerd inrichten van de bedrijfsvoering, soms als resultaat van Business Process Reengineering (BPR) activiteiten. SOA Hoewel BPM revolutionaire mogelijkheden biedt, is Process Service Proces kwaliteit management aanpakken zoals Lean niet 2. alles nieuw. Vrijwel alle onderdelen van BPM zijn eerder en Six Sigma voor continue procesverbeteringen. onder andere namen naar voren gebracht. De kracht 3. Corporate Performance Management als aanpak om van BPM komt dan ook vooral uit de convergentie Business Process strategie van een onderneming te monitoren. van de bedrijfskundige- en IT-disciplines die in het verleden 4. Enterprise Application Integration (EAI); automatiserBPM Process Step Process Step gescheiden werden benaderd. Deze onderwerpen ing van de stroming van berichten tussen applicaties die zijn naar elkaar toegegroeid in termen van te bereiken stukken van het bedrijfsproces uitvoeren. doelstellingen, aan pak, ondersteunende technologie en 5. Workflow Management (WFM); de geautomatiseerde besturing door het management. ondersteuning van operationele processen, vaak in de Core Business Service Core Business Service SOA vorm van de stroming van documenten langs mensen die stappen in het proces uitvoeren. 6. Enterprise Content Management (ECM); het digitalService Orchestration iseren van bedrijfsinformatie en het beheren van digitale dossiers. Step Step
Technical Integration

Basic Service

Basic Service

Software Component

Software Component

Software Component

BPm solutions sEamlEssly fit an soa EnvironmEnt

The architecture of a BPM solution is characterized by the explicit segregation of the control logic of business processes from the execution of their individual process steps. The controll of business processes is carried out by a BPMS, based on the process models. Services are invoked for the execution of process steps, meaning that a process uses a service. The completion of a business process also represents the provision of a service, since it can be described in terms of the inputs and triggers to initiate the process and the outcome of the process. Hence, a business process also realizes a service. This occurs at various detailed levels of the architecture. Services define the exterior of the system, processes the interior. The figure below shows services and processes at a number of detailed levels. BPM operates at the highest level, where processes and process steps are meaningful to the business. SOA is also involved at the business level, not with a focus on processes, but on business services. At the service orchestration level, the purpose of the processing algorithm is to combine the services output from different software modules into a service meaningful to the business. Service orchestration is mainly a technical integration issue, outside the scope of BPM and SOA.

Figure 11 Processes both use and output services

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imPact of BPm on the organization

oPErating ProcEssEs
Because BPM brings changes to operating processes in its wake, some jobs will disappear, some will change and new ones will be created. For example, the person who delivers mail internally will give way to an automated stream of documents, and the duties of an operations manager concerning the directing and controlling of processes will be taken over by the process engine. As a result, the role of an operations manager will become more interesting in that it will move to the tactical level (HR-management, quality control, etc.). Employees might fear that the introduction of BPM will mean the loss of jobs and more supervision of their work, given that BPM allows deeper insight into all kinds of process information. It is important to prepare for this fear and the resulting resistance when introducing BPM into an organization. Fortunately, BPM is ideal for implementing changes to processes and organizations iteratively. This represents a fundamental difference between BPM and BPR, a management methodology popular in the 1990s involving an almost revolutionary approach to changing outof-the-box processes. By opting for BPM, an organization puts a lot more emphasis on gradual change. As indicated above, BPM entails a shift of managements attention from the day-to-day control of operating processes to matters with a higher tactical content: > resolving situations that prove to be outside the scope of standard processes; > giving consideration to process improvements based on process intelligence that BPM presents. Apart from managers, employees have an important part to play here of course. The impact of BPM on an organization depends largely on how it is implemented.

alignmEnt of BusinEss and it

The combination of BPM and a services-based architecture creates the opportunity for simplifying the alignment of business and IT4 . Until very recently, there was a wide gap between the requirements business wanted satisfied and the systems that IT departments delivered. The only way to bridge this gap was by the time-consuming and error-prone documentation of the business needs, followed by their translation into concepts that made sense to an IT department. BPM and SOA provide business and IT with a common language and coding system, so that alignment becomes simpler and more precise. The services with their standardized semantics (actual meanings) are the words and the architecture is the grammar of that language. BPM gives the business control over the use of services in its business processes, allowing the IT function to concentrate on the application software and technology for the implementation of the computerized services. Accordingly, discussions about harmonization need only concern the definition of services.

4 This also applies to the harmonization and collaboration between business departments or business partners.

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BPm roadmaP: think Big, start small, scale quickly

BPM is not something you buy or build. It is a management discipline that an organization has to adopt. The introduction and use of BPM is not a one-off project therefore, but a process requiring a roadmap for its complete, phased and planned implementation. BPM is not a universal solution, but rather an approach to be applied in a variety of areas at strategic, tactical and operational levels, as described in the previous section. The BPM roadmap lays out the priorities and options concerning the application that is suitable for the organization in question. Accordingly, it is specific to an organization. An organizations BPM roadmap cannot exist in isolation, but needs to be integrated into the standard planning cycle of the business, for the simple reason that BPM is not an end in itself.

PlatEau Planning By thE clovErlEaf mEthod

The BPM roadmap is based on plateau planning, an approach that allows adjustments to the implementation process because of changes in the focus and priorities of the organization or experience with plateaus already established. For plateau planning, Atos Origin uses its proven cloverleaf method, which is oriented towards creating a comprehensive plan for each plateau. The method considers the four leaves > management and organization, > processes and services, > IT systems and infrastructure > people and culture in combination. This balanced method is ideal for BPM, because this has a broad sweep that takes in organizational, process-related and technological aspects.

Management & Organization

Processes & Services

Performance

IT systems & IT Infrastructure

People & Culture

Figure 12 Cloverleaf method for plateau planning

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Each plateau comprises several projects managed using a programme structure. The projects might concern the application of BPM to a specific business process or the implementation of BPM itself, such as the selection of a BPM tool, training of management and employees, putting the governance of processes in place, or embedding BPM in the employee participation structure. A complete business case is also drawn up for each plateau.

Maturity models are used during the assessment study as tools for analysing the maturity of the organization from different standpoints, mainly, though, to perform a reality check on the definition of the first plateau. These models do not provide the guiding principles for preparing a BPM roadmap, only the limiting conditions.

diffErEnt imPlEmEntation stratEgiEs

As stated, BPM implementation strategies differ from case to case. BPM is sometimes implemented using an architecture-driven approach, in combination with an SOA for example. In other situations, BPM is the vehicle for implementing Six Sigma quality enhancement programmes. And in yet others, BPM is introduced as an extension to the implementation of workflow and document management.

BPm roadmaP assEssmEnt study

Atos Origin develops the BPM roadmap for an organization as part of an assessment study in which: > the business and IT visions and strategies are included; > the existing situation as regards processes, management, governance and IT systems is documented; > an outline is produced of the long-term business and IT architectures; > a BPM vision and implementation strategy is developed, taking into account the organizations change style and capacity; > an outline plateau plan is made, including an evaluation of whether the BPM roadmap can or should be integrated with other business and/or IT programmes, such as those for the adoption of an SOA; > the first plateau is defined and planned in detail, and > a sound business case is prepared for the first plateau.

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BPm suites and suPPliers

Although BPM is not itself an IT application, the use of a computer system for BPM (BPMS) is essential. A comprehensive BPMS includes the following components: > the process designer which a business analyst uses to model and simulate processes (employing BPMN for example) > the process engine which executes process flows (written in BPEL or BPML for example), with manual tasks being delivered to the intrays of employees and calls being issued to services in the case of computerized steps. > the business rules engine which holds the definitions of business rules, including the conditions governing their application; > a process analysis function also referred to as business activity monitoring (BAM) that provides continuous feedback on the status of processes; > composite applications commonly known as business services the module that provides computerized functions in the form of services that can be invoked by business processes; > knowledge management which allows employees to share tasks, content and documents among groups and teams; > document management that enables electronic documents, images and other files to be stored in folders and managed; > tools that facilitate cross-departmental collaboration such as forums and bulletin boards; > a business analysis function that provides reports and dashboards from which managers can identify issues, trends and opportunities; > a portal that functions as a communal, personalized user environment giving access to the above tools.

Portal

Know mana ledg gem e en t

tent Colla bor Con gement atio a an n m ocess analyticus Pr

ess engine Proc
iness Bus lytics ana

Process Designer

Rule s engine

Com ns posit atio e Process Applic

Figure 13 Components of a BPMS. Source: Gartner

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As stated on page 13, BPM arose from the merger of various methodologies, including WFM, ECM and EAI. As suppliers of BPMS products often have a background in one of the original areas, the stronger functions of their products reflect this. Thanks to ongoing development, as well as mergers and acquisitions in this market, the scope of BPMS suites has expanded further. In practical terms, however, the integration of different components united in a suite under a single logo is not always optimal. With the backgrounds as a framework, Forrester divides the market for BPMS products into three segments: human centric, document centric and integration centric. Atos Origin is knowledgeable concerning the leading suppliers in all three segments and has formed a partnership with each of them.

> IBM > FileNet > Oracle > Cordys > EMC2 > Microsoft

> TIBCO > Global 360 > SAP > JBoss > ARIS Platform

Figure 14 Atos Origins partnerships with BPMS suppliers

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atos origins BPm services

Under its Consult-Build-Operate concept, Atos Origin provides services for all parts of the BPM life cycle, from strategy definition and transformation, to the leveraging of BPM solutions. The BPM services relate to the business structuring provided by Atos Consulting and to the technology required for BPM. The diagram below shows the BPM portfolio of Atos Origin. Atos Origins BPM services stand on a foundation built from generic enterprise architecture, IT governance and change management services. They comprise: > BPM strategy services for developing a BPM strategy and roadmap that cover the entire range of business and IT operations, including the supporting business case, creation of acceptance within the organization, etc.; > Process centric organization services that focus on making an organization process-centric and customer-centric, and on the change management, enterprise architecture and other resources needed to effect this; > Business process provisioning execution of business processes by Atos Origin, such as in the form of payment services that Atos Worldline provides; > Process modelling & design the design, modelling, simulation and validation of processes; > Process monitoring & analysis set up and execution of monitoring and analysis, based on KPIs, management reports, etc.; > IT landscape process enabling & integration - transformation of the IT landscape, for example, to a service-centric architecture, including integration of the IT systems and the business processes; > Process support & IT execution - provision of IT support for business processes, including management and maintenance of IT systems.

Consult Business

Build

Operate

Process centric organization

Business Process Provisioning

Architecture & Governance

Information Services

Information Technology

BPM strategy

Process modeling & design

Process monitoring & analysis

IT landscape process enabling & integration

Process support & IT execution

Figure 15 Atos Origins BPM services portfolio

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aBout atos origin

Atos Origin is an international information technology services company. Its business is turning client vision into results through the application of consulting, systems integration and managed operations. The companys annual revenues are EUR 5.8 billion and it employs 50,000 people in 40 countries. Atos Origin is the Worldwide Information Technology Partner for the Olympic Games and has a client base of international blue-chip companies across all sectors. Atos Origin is quoted on the Paris Eurolist Market and trades as Atos Origin, Atos Worldline and Atos Consulting.

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Atos Origin Corporate Village Da Vincilaan 5 B-1930 Zaventem Belgium

Atos, Atos and sh symbol, Atos Origin and sh symbol, Atos Consulting, and the sh symbol itself are registered trademarks of Atos Origin SA. November 2008.

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2008 Atos Origin.