BPM Blogs worth reading 2017

Here it is the list of BPM blogs which I normally consume on a random basis for research purposes.

On BPM at large:

  • Bp-3 – Scott Francis’s blog brings a balanced viewpoint on BPM trends and challenges and entrepreneurship.
  • Cape Gemini blog – A good source to look for trends on digital transformation.
  • Column 2 – Independent source on BPM systems review by Sandy Kemsley.
  • IEEE Spectrum – Future technologies brought by IEEE.
  • Improving Enterprise BPMS – A great blog to look for frameworks by Alexander Samarin.
  • Jim Sinur – Good insights about BPM future trends.
  • PeterVan – A 1.0 version type of blog that curates interesting articles from Peter Vander Auwera.
  • On Web Strategy – Dion Hinchcliffe writes about social business.

On Analytics:

On Complexity:

On Enterprise Architecture:

  • Found In Design –Nigel Green writes about advanced Enterprise Architecture.

 

If you are interested in 2016 list click here.

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From Know Your Customer to Know Your Tax Payer

I have been working with a tax authority on developing some scenarios that were translated into a transformation roadmap with the objective of increasing tax and non-tax revenue.

One of the challenges is to predict active debt management before arrears occur. The idea is using advanced analytics by modelling the risk that company will fail to pay their taxes, by creating clusters of potentially high-risk debtors, based on available information regarding the annual, quarterly and monthly returns filling. One of challenges that exists in this approach, despite being proven that is more effective that discover “after the fact” the existence of a tax debt, is by the constant change in business models, companies makes new investments or shift to new business models that drags quickly the company to a position it cannot comply with its tax payment obligations.

Know Your Customer (KYC), is an approach that is being used, mostly in financial institutions, in terms of opening a bank account, require trading operations or process payments. Some banks are enhancing the concept of KYC to a point that they rely on information that is not related with transactions between the customer and the bank. As I pointed in this previous post, about creating a Banking Platform as a Service, that goes beyond on implementing a new IT capability that can spark new business opportunities and expand the traditional bank value chain, banks today can have a very precise view of a profile of an individual or enterprise. In some KYC scenarios and because of the magnifying effect of such profile. As an example, if you are an individual, instead of asking what was the brand of your first car, they will start asking questions on which part of the globe you were 2 months ago, where you stayed, what brands did you spend money with and what kind of affiliation you have with a 3rd party loyalty program or even if you have contracted loans with other institutions and which under what circumstances such loans were requested.

From a government perspective, using a shared and expanded Know Your Tax Payer (KYTP) is a valuable approach not only to prevent tax arrears or unrecoverable tax debt, as well as uncover misreporting and non-compliance related with the structure of income flows or unreported income or even claiming subsidies or tax deductions regardless of the source. Despite there is a convergence of government data interchange effort, as well as, trying to overcome some legal constraints in terms of sharing tax information across multiple government agencies that own the responsibility of collecting different non-tax revenue sources, it is still clear that there are missed opportunities in terms of securing tax collection.

One of the events that is being used to detect failure on future tax payment, is when is flagged by bank that a customer is missing payments regarding a loan or its ratting was put with a negative outlook. That event can be used by the government agency to start working with the individual or enterprise in order that will not exist missed tax revenue. The Know Your Tax Payer (KYTP), can be also used by all the entities that feed knowledge base, e.g. other banks that belong to the system (Telecom’s, Utilities, Insurance Companies) will also be alerted by a missed loan payment contributing to decrease their risk exposure, when debt carousel schemes are implemented. There are other scenarios that such an approach can also be beneficial, not only related with tax compliance. In terms of investment programs, related with shared responsibilities on entitlement of government funds, which access is granted by a government subsidy, as well as, by banks, even under a syndicated loan approach, using a KYTP will contribute access to grants or subsidies to entities that deserves such access and in better terms and change tax payer behavior.

The man and the machine manifesto

“Self-organised systems, lie all around us. There are quagmires, the fish in the sea, or intractable systems like clouds. Surely, we can make these work things out for us, act as our control mechanisms, perhaps most important of all, we can couple these seemingly uncontrollable entities together so that they can control each other. Why not, for example, couple the traffic chaos in Chicago to the traffic chaos in New York in order to obtain an acceptably self-organising whole? Why not associate brains to achieve a group intelligence?”

Gordon Pask, The natural history of networks

 

Today there is a shadow or sense of doubt if we as humans want machines to think or to do – some people already argue they do think, detached from the consciousness bond – and it would replace humanity soon, as many others advocate singularity is near with systems that can adapt themselves, command, control other systems, something as Douglas Hofstadter referred to “tangled recursion” as an example of machine intelligence.
I ultimately believe that humans and powered AI machines will work together, not compete against each other. Humans will be much more empowered by the symbiotic combination of machine work, meaning that we will need to continuous to adapt to rather than become indispensables, we increase our own capabilities.
However, there are many untamed challenges in terms of such man and machine symbiosis, as we the human species, have the responsibility to define by which rules we want to live, as machines progress in new areas, changing the foundations on our society is organized, as per bellow.

Governance
Much has been discussed how to define machine design rules and relevant regulation. Some experts believe that is the hands of humans to define such rules and while machines are tightly controlled by humans we can define how machines should be engineered. However, some examples related with war machines, demonstrate that Isaac Asimov’s laws do not apply anymore, once the potential for harm is increasing rapidly.
Hence the challenge stands. Consider the scenario of an intelligent medical system that provides counselling and advisory, induces a medical doctor with error. Who is responsible? The Doctor? The system? The entity that conceived the system? The trainer that trained the system to make decisions, based on a knowledge base? How do we deal with human life loss? Regulatory bodies for the engineering profession or other domain expertise, have clearly defined rules for design or professional act decisions, made by humans, however, in terms of machines endowed with any kind of intelligence, governance appears missing and there is no common broad agreement.

Societal impact, innovation and economy growth
There is no doubt that technology was always the common denominator that sparked economic growth, the press, steam engines and lastly the internet, created in three different moments in time tectonic shifts. However, prosperity also contributes to unemployment. Technology tends to automate at scale and replace repetitive tasks, but the last wave of technological developments is already targeting knowledge workers as well. Hence, the challenge is not related with low income workers only. The balancing act should be how the use of technology can contribute to higher living standards, diminish inequality and drive inclusion.

Human and Machine Interface
Mixed reality is becoming a popular interface in human-computer interaction for combining virtual and real-world environments, and it has recently been a common technique for human-robot interaction, it price is however a barrier for adoption and creates digital imparity. Natural language processing is becoming another de-facto interface, applied for example on business to consumer interactions, but some questions are still not addressed in terms of humans that speak a language blending influence of their own culture that a machine is not aware of. Despite the advance interacting with devices like smartphones, as technology progresses, it is relevant do involve interface designers to make a reflection how machines affect human to human interactions and human to machine interactions.

Ethics
Tackling the trade-off between privacy and security is today already a challenge, related to the fundamental but complex separation between what constitutes the private and the public space of an individual. The definition of a concept, a domain, is a consequence of the surroundings, of the environment we live and the multitude of human principles and beliefs. What in a society can be accepted as a practice, in another can be condemned. The concept of privacy is constantly being redefined to a point that can be transform into a matter of transparency, for example, sharing publicly your taxes declarations if you are a politician. How we deal with ethics in terms of a machine that have access and share our medical records that will make decisions in terms of triage or sense of urgency related with medical treatment? It’s in ethical that a machine can make judgment about predicting future crimes or provide a credit risk score based on data that is related with our profiles?

Would you consider ethical to create a system that reproduces an nonexistence life form in other medium?

Wired published a story about a son that knew that he was just about to lose his father and created a BOT, called DadBot, to preserve his existence. The story can be found here.

As I finished reading the article two, above many other questions came to my mind:

  1. It is ethical to preserve the existence of a living being after his death? The definition of a concept, a domain, is a consequence of the surroundings, of the environment we live and the multitude of human principles and beliefs. What in a society can be accepted as a practice, in another can be condemned. Now, I believe because this is a foundational universe functioning rule, that what is born it will die. We all know that we want to preserve the life of our beloved ones and definitively there are scientific studies that demonstrate how positive it is to create other ways of engagement with a person that does not inhabit our world. However, is my belief that recognizing that someone died, implies we cannot recreate interaction. One can argue that browse pictures or watch videos is another way of interacting. Would you consider ethical to create a system that reproduces an nonexistence life form in other medium?
  2. How fast the system is going to become obsolete? James Vlhaos, refers that he collected information from his father in a way that the BOT could later share stories and past experiences with the interlocutor. He provides an example how the system is context aware and interacts with the user remembering past stories that were lived together, “Remember that big barbecue dinner they hosted for us at the taverna?” – he writes – nevertheless, what happens when there are no more stories to tell? Are we interested in repeat the experience until exhaustion is reached? One can argue that is the precise function of the system and immortality is reached. If you want to know about a person, particularly younger generations that never met that person, they can get acquainted without facing the risk of facts distortion or even loss, as it happens when the elder generations die and the memories are washed away with the dead. On the other hand, this is another way to preserve the bond, the ties and the affection, like it happens in real life and people like to repeat the same stories over and over to create that sense of collective existence. Last, how do you as a solution architect, a designer, choose the content? Image that your relative committed war crimes, something that second world war generations need to deal with in Germany, would you recreate the life of your siblings, your grandfather if you knew he committed such crimes, would you hide those facts or would you expose it?

How banks are missing the Banking As a Service platform opportunity to unusual challengers

Oil & Gas companies are reinventing the customer journey at the service station and it is not focused anymore on enhancing the non-fuel business business at the retail store. What was a trend in terms of disinvestment in the downstream business is picking up as a new business opportunity to increase revenue and customer stickiness. On the other hand, some banks are loosing opportunities in terms expanding their value chain and services to a combination of joint ventures between Oil companies and Telecom’s.

We see Amazon going to brick and mortar grocery stores; we see Oil & Gas industries enter into renewable energy, we see Utilities companies entering in mobility business, we see Energy and Construction also entering in renewable energy. Hence, there is going to be fierce competition among the mature industries, between incumbents and new entrants and disruptors.

Digital transformation fades the value chain separation and starts an intersection, meaning that if Engineering and Construction companies enters into the mobility business by providing services related with electric car charging stations, soon will be working together in partnerships will gas station retailers, convenience stores retailers, banks, telecoms, mobile money providers and together, the ecosystem of companies working in the same space interacting with the consumer as one.

The case of the Smart Service Station

The book The Digital Transformation Playbook Rethink Your Business for the Digital Age [1] , provides a simple framework on how to access your position “vis-a-vis” challengers that by the power of technology start to intersect business models inside of competitors value chain. What I like about the framework is how easy it is to organize some ideas to spark digital transformation.

Telecom’s instead of banks see 3 different kind of customers:

  • The car driver;
  • The retail store;
  • The 3rd party provider – a company that does not operate at the station. It can be an insurance company, an online retailer, GPS technology provider, the car manufacturer;
  • The car manufacturer, if the car is connected, like some of the new generation models.

The Bank, only sees the car driver.

The Telecom wants to provide the following value proposition:

  • The car driver – pay on customer terms; product offerings and promotions that are related with the real customer needs and wants; access to extended valuable services, like journey management, integrated road assistance.

The Bank only offers cashless payment to the car driver.

In terms of value network, the Telecom offers to the car owner:

Proposition:

  • Integration, with the payment providers, retail stores;
  • Customization, the Telecom is able to tailor offerings based on any data coming from interactions with the partner ecosystem;
  • Simplicity, the car driver can pay using a mobile phone only.

Differentiation:

  • Customers, 4 customer categories instead of the car driver only;
  • Partners, endless partners connected with the platform, letting the car driver add or select the partners that we likes to engage with;
  • Complementary products or services, by the effect of partnership, beyond the typical cross-sell, up-sell;
  • Cost structure, lower. Customers are sensitive to fees and levies that banks charge using cards;
  • Data assets, a much higher precise of the customer profile that is not based on the transactions that occur at the station, but across all the connected partners.

The Bank only offers :

Proposition:

  • Simplicity. Customer do not need to use cash;

Differentiation:

  • Brand.

Banks could for example expanding value chain and services: connect the customers with other service providers – e.g. wellness providers, retail companies – becoming part of customers’ needs and lifestyles. The more the customer interacts with the customer ecosystem, the more the ecosystem benefits in terms of shared customer profile data and business transactions. However, as some banks are still focused on putting their customer’s to transact with the bank, they forgot that Telecoms and Oil & Gas companies, or even non-usual players are shifting customers to transact with banks at gas stations.

 

Sources:

[1] The Digital Transformation Playbook Rethink Your Business for the Digital Age –  David Rogers, ISBN – 978-0231175449

 

 

 

 

Banking As a Service platform – similarity or competitive advantage

Banks that are embracing their digital transformation journey are becoming open and  designed to encourage new business models, using Open Socio-technical Systems during the transformation journey.

Three concepts emerge here:

  • Digital finance advisor: deliver tailored, personalized advice that meets the customer’s financial needs taking into consideration, the unique customer profile – the digital twin – based on customer life style, aspirations, appetite for risk, existing and upcoming transactions.
  • Banking disintermediation: developing special alliances and partnerships that enable them to provide offers that appeal to customers. Doing banking without the customer feels that is doing banking.
  • Expanded value chain and services: connect the customers with other service providers – e.g. wellness providers, retail companies – becoming part of customers’ needs and lifestyles. The more the customer interacts with the customer ecosystem, the more the ecosystem benefits in terms of shared customer profile data and business transactions.

 

the forces

The current status-quo of banking industry in competitive markets

 

The realization of these three concepts is via the bank as a platform with a connected ecosystem in which integration is the core component and where an API-enabled platform and marketplace is a key strategic consideration. However, the API capability, combined with strategic partnerships is not enough. With most of the new IT capabilities combined with new “micro-business models” being already available in the market, Banks are partnering, investing, going on tour to multiple venture forums for shopping new IT capabilities, or discover new ones by organizing hackathon events.

There are some important consequences of this shift:

  • IT reduced expenditure. IT departments will no longer need to develop applications. They already exist in the market. They will continue to be focused on core banking systems, the middle-ware and the classics banking channels (web/mobile/social/wearable).
  • The CIO will focus on building and evolving the banking platform, but he will need to become a business changer, otherwise, we will only be solely focused on supporting the business.
  • Solution providers will start to loose importance in the market unless they can offer an unique or distinguished capability.
  • Ultimately, the bank can implement the concept of the “bank of me”, which the customer chooses what kind of capabilities he wants to use, relevant to its needs, rather than play with the ones the bank offer via channels.

 

Bank ecosystem

The era of open socio-technical systems

 

Under this new paradigm, designing, implementing and make available a banking as a service platform – like a cloud computing provider – is becoming a mainstream trend in banks that are embracing digital transformation, offering complementary third party financial or non-financial services alongside with the bank’s core products. The bank becomes a catalyst of third party providers to provide a more appealing spectrum of services and offers as co-branded products.

There is however, a fundamental design flaw in this approach. Under the concept of the “bank of me”, customers do not want to be forced to consume what is made available by the banking platform, the reason for this, is by the same way a couple of years ago we entered in the era of the customer – by the collision of forces of mobile, social, cloud, data – that shift operations control to the hand of the customer, so does such principle apply when designing the banking platform.

As Damian Madray [1] expressed:

When we design, our designs generate behaviors that in turn shape our collective experiences through culture. The concept is fairly simple but the feedback loops are all — encompassing: essentially all of the things that we design and that surround us, from our language, to our dwellings, our cities, tools, aircrafts, bedrooms, kitchens, religions, sports, design us back. It all feeds back. And this feedback has been coined Ontological Design [2] by Anne-Marie Willis.

What this means is the customer wants to have the freedom to design interaction on his own terms. As I wrote some years ago:

People will be over connected naturally without the need to request for connection.

But such connection must be related with with whom I really am, not a profile or customer segment I belong to, or personas, as it is labeled user design or in change management methodologies.

Ontologies providing meaning to the data manipulated thus no one needs anymore to learn […] its meaning

Elizabeth Tunstall [3], provides another interesting perspective, as our universal individuality is cannot separated by the sacred, profane and spirituality. The flow of other people, nature, environment and ancestor influence that provided us the life principle guidelines we adopt or tend to ignore that is a consequence of what surround us and make us unique individuals. Investec, embedded this principle in one of the latest marketing campaign, more than data.

Investec

Investec’s – More than data – from the customer profile to who you really are as an individual

 

Despite the bank as a service platform brings advantage to consume or offer products or
services through the APIs ecosystem, most of the banks will ultimately adopt this strategy bringing all around similarly and the new digital bank will soon become the same old bank it used to be. Allowing the customer to design its own banking experience based on habits of mind, personality, selfish goals, personal interests leveraged on the platform capabilities will make the bridge between the customer and the bank as separated self-contained entities.

References:

[1] The Evolution of Design with Culture Thinking – Why we should think about culture before we design – Damian Madray, 2017

[2] Ontological Designing – Anne-Marie Willis

[3] Design Anthropology, Indigenous Knowledge, and the Decolonization of Design
Elizabeth Tunstall, Fabrica, 2011.

 

BPM Conference Portugal 2017 – an event in review

“Recursive enumeration is a process in which new things emerge from old fixed rules. There seem to be many surprises in such process […]. Recursively defined sequences […] possess some sort of inherently increasing complexity of behavior, so that the further out you go, the less predictable they get. This kind of thought carried a little further suggests that suitably complicated recursive systems might be strong enough to breakout of any predetermined patterns. And isn’t this one of the defining properties of intelligence? Instead of just considering programs composed of procedures which can recursively call themselves, why not get really sophisticated, and invent programs which can modify themselves, programs which can act on programs, extending them, improving them, generalizing them, fixing them, and so on? This kind of “tangled recursion” probably lies at the heart of intelligence.”

Douglas R. Hofstadter – Gödel, Escher, Bach: an eternal Golden Braid – a metaphorical fugue on minds and machines in the spirit of Lewis Carroll

Artificial Intelligence (AI) I is democratizing societal change, evolving human progress by helping people and enterprises innovate in ways not previously possible. Paul Harmon presented a historic – still important, perspective how long is the road of Artificial Intelligence materialization. Technologies like machine learning; vision and natural language processing technologies are blended together, and ultimately, platforms with intelligent technologies are integrated into interactive systems to enhance human cognition. His point of view was to bring awareness that most of these technologies exists since the 80’s, but for reasons related with low ROI, lack of investment on research and development that expanded existing rudimentary features took time to materialize. However, as Paul pointed the time to adopt AI is now. Making a profit and achieving success through innovation and process improvement. He gave the example that in banking industry, mobile app’s is no longer enough, applications that can talk to customers and announce decisions is the next logical step if a bank want to stay ahead of competition.

Ross Brow, brought the perspective on by using 3D environments, virtual reality and gamming, it is possible to augment human creativity, empathy, emotion, and judgment with the computational speed and ability to analyze business processes. I particularly liked the examples around passenger movement in airports or the other one, a case management back-office process on which using those technologies it is possible to process large amounts of data see and fell the business process moving, identifying bottlenecks and discover new improvement opportunities. Ross presentation was an eye opener how you can use virtual environments to support business transformation. In an era of a multitude of tools and techniques used to reinvent a business, virtual reality – still perceived as a domestic consumer technology used for entertainment – is definitively a groundbreaking disruption approach to innovate an enterprise.

Manuela Veloso talked about robots, not in the factory floor context, but in the personal digital assistant field. Digital assistants get to know the people they serve over time so they can provide a personal and helpful service. Manuela stressed the long road ahead in terms on what is needed to robots to learn. By the implementation of computer vision, robots gain sight so they can detect objects, create space awareness and by the combination or learning human instructions they can move and serve humans augmenting human tasks in the workplace. However, the day were robots will combine multiple AI technologies and be able to unleash a much wide possibilities in the business context is still not a reality – the example she provided on how a robot can open all the possible door handles existing in the world and move freely on a building is still something far from reality, as it is the application of our all dreams in terms of machine powered devices.

Bianca Furtuna, presented a comprehensive perspective on AI, by making applications and devices intelligent and giving them the capability to comprehend and interact with the world naturally, organizations can continue to improve human to machine interactions in powerful way. She described a compendium of technologies that can be used as the new capabilities to drive business transformation. Vision can be used from object detection to face recognition and emotions; natural language processing used to recognize intent including jargon and local culture references or even language blend as it occurs in multi-lingual language countries and search to help humans find specific information in knowledge repositories together with context awareness to provide more relevant information.

Paulo Cortez, went through a series of real examples where AI is being used already today. I particularly liked the mass personalization in banking industry, which financial institution collects and consolidates customer’s preferences, behaviors, likes and dislikes, and expectations, way beyond transactional banking and get personal recommendations about the kind of financial products that fits their truly needs and wants. As he pointed out, intelligence gets personal.

If there was shadow or sense of doubt over this event edition was definitively if machines could think and it would replace humanity. The effect of singularity or machine domination is still a conceptual fantasy mostly driven by science fiction movies and delusional predictions that keep being postponed year after year. I ultimately believe – and this was one of the major conclusions of the event which many attendees confirmed during some brief talks I have with them – that humans and powered AI machines will work together, not compete against each other. Humans will be much more empowered by the symbiotic combination of machine work, meaning that we will need to continuous to adapt to rather than become indispensables, we increase our own capabilities.

2016 edition summary can be found here.