The Future of Home Lending

The Future of Home Lending

Business Process Management and the Service-oriented Architecture

Dain Ehring, CEORobert Carpenter, PhD, CTO

MBAA’s National Technology in Mortgage Banking Conference & Expo

March 16, 2004

National Technology in Mortgage Banking Conf & Expo Page 204/10/23

AgendaAgenda

Business Process Management Overview & history Characteristics Operating benefits

Services-oriented Architecture Characteristics Operating benefits Technology view

BPM + SOA = BPMS Mortgage drivers Reference implementation

Business Impact Moving from Good to Great

Summary


Business Process ManagementBusiness Process Management

Business processes define a company Critical source of competitive advantage and market

differentiation Very complex, constantly evolving Aligns processes more directly with organizational

objectives

The “ideal” BPM solution Connects to any system associated with the process Blurs organizational boundaries Supports compliance Monitors process status with eye toward continuous

improvement


Providers and Suppliers Providers and Suppliers

Come from four areas: Traditional workflow & content management vendors Business process engine companies Middleware providers extending application integration Vertically focused software & service providers


Business Process Management (BPM)Business Process Management (BPM)

Management Theory Modern Technologies+ = BPM

Total quality management

Six Sigma

Business engineering

General systems thinking

Application development

Systems integration

Vertical market focus

Service-oriented Architecture

Workflow

Transaction management

XML and Web services


Some BPM History…Some BPM History…

1980’s = Business Process Reengineering (BPR) Design a simpler process, implement through a one-time organizational

change; re-do the factory flow• Benefit

– Improved performance within the enterprise• Problems

– Failed to provide agility, support ongoing change, or combine processes with partners

1990’s = Enterprise Resource Planning (ERP) Ingrained best practices in huge software applications

• Emerged from MRP in late 80’s• More inflexible• Didn’t facilitate integration of business partners into processes • Focused mainly on manufacturing & finance only• Never really was “enterprise”


Today Today

BPM goals

End-to-end multi-company business processes built to adapt and enable outcome-focused solutions to problems

Share business processes across the enterprise, and with partners, to bring ultimate value to customers


BPM Characteristics BPM Characteristics

Closed loop, changeable processes Companies can make changes based on the process,

implement new workflow, analyze results, repeat• Self-correcting processes resolve business issues• No “baton drop”• Change is built-in• Unites business & technology/people & systems


BPM BenefitsBPM Benefits

Improves business agility Enables a clearer division between IT & LOB

Clears up the sourcing “jigsaw puzzle” Whether or not to outsource…? Leads to determining commodity v. value-add application

development BPM enables control over the process, wherever it resides

Explodes technology stovepipes & silos Leads the way to end-to-end automation

Creates reusable process patterns Once model the process, can implement change rapidly

National Technology in Mortgage Banking Conf & Expo Page 10

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The BPMS The BPMS

BPM + services-oriented architecture = the BPMS

What the BPMS does Model, deploy, and manage business processes across

applications, departments, business partners Works behind the firewall and over the Internet

BPMS requirements Extreme flexibility Reliability Security


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The Services-oriented Architecture The Services-oriented Architecture

Architectural foundation for BPM Extends processes beyond the company’s walls Combines best of component application engineering and

process engineering Combines business and technical systems to make

processes that flex and recombine More control over internal processes and more interaction

between internal processes and those of partners “Loosely coupled” approach enables dynamic changes to

processes


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Market ViewMarket View

“Software-as-service providers are rapidlyadopting XML-based Web services standardsboth to lower integration hurdles and to level the playing field against packaged software competitors”

- Summit Strategies

12/2003

“Your BPM initiative will benefit from

an enterprise model built on service-oriented architecture and web services”

- Ovum Research

3/2004


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Traditional ViewTraditional View


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Service-oriented Lending ArchitectureService-oriented Lending Architecture

SOA Reference Implementation


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Market Evolution Toward SOAMarket Evolution Toward SOA


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Before the Services-oriented ArchitectureBefore the Services-oriented Architecture


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The Services-oriented Architecture in LendingThe Services-oriented Architecture in Lending


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Business ImpactBusiness Impact


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SummarySummary

BPM is the future Consider a services-oriented architecture Adopt an evolutionary approach Long term value of software as services

• Rapid time-to-market• Less risk• Easier growth/evolution

The Future of Home Lending

Business Process Management and the Service-oriented Architecture

Dain Ehring, CEO, & Robert Carpenter, PhD, CTO

Q & A

The Future of Home Lending

Documents

business agility

business issues

bpms bpm

simpler process

bpm characteristics

bpm benefits

internal processes

bpm history