As a part of the new Lloyds Banking Group (LBG), HBOS is constantly working to keep costs down and improve services to customers by delivering efficiencies through shared services across the Group.
In 2007, IT was challenged by HBOS senior management to develop strategies and programs to help drive down the cost/income ratio whilst creating technology platforms which would provide growth capability and increased levels of customer service. In response, HBOS IT developed plans to create a centralized BPM and document management service to enable the organization to transform operational processes. IT recognized from the outset that for the platform to be effective enterprise-wide, it would need to meet the different requirements of the three largest HBOS divisions: Corporate banking, Retail banking, and Insurance & Investment (I&I). 
Working closely with the business, HBOS IT developed a set of requirements, which specified that the BPM tool needed to be agile in its ability to define process rules without needing complex programminga capability that would enable business users to manage processes without extensive IT intervention. Other requirements included the ability to enable consistent service and compliance with regulations, deploy process changes defined by the business units with capability to rollback, support process documentation and continual improvement through modeling and simulation, and finally to reduce training time for bank agents by enabling process simplification and repeatability across business functions.
HBOS evaluated five vendors over a six-month period through a full RFP process, followed by a champion/challenger session between the final two candidate products. TIBCO was selected for its ability to best meet the banks specific requirements. HBOS proceeded to set up a second selection process, this time to pick a partner that would help develop and implement the BPM service based on TIBCO. The bank published another RFP, which specified, among other requirements, that the partner be able to provide the bank with expertise in architecting and delivering platforms and solutions in a cost effective global sourcing model. The bank took a month to carefully evaluate four offshore consulting organizations before selecting HCL Technologies to develop the BPMS service.
The platform delivers end-to-end automation of document distribution. Communication arriving as email, web form, fax or paper is digitized and fed into a multi-platform document management repository. Services built in the HBOS SOA provide a level of abstraction from the repository, from which documents are sent to the TIBCO BPM platform to be automatically routed to the correct bank colleague. This first deployment is not transformative, says Richard Frost, BPM Lead Architect at HBOS, but in this coming year, we will expand it to support much more complex business processes. Establishing the platform has been the key step and represents a unique approach to BPM implementation that fits our corporate structure.
HBOS is already well along in building the BPM process that will automate document flow for the banks corporate division. All paper will be scanned at regional service centers, then indexed and assigned by a central team to various work queues, then delivered electronically to the correct workgroup. 

HBOS strategy included the need for BPM.  One that was a platform not just a point solution.  Consistency of service and compliance with regulatory processes was one of the key goals of the project.  The key benefits of implementing BPM include:

1.	Processes are defined by management and enforced by BPM 
2.	Exception reporting to highlight skipped steps, excessive wait times etc. 
3.	Documented and version controlled processes with roll back 
4.	Shorter training and proof of process followed minimizes risk of high staff turnover 
Modeling and simulation tools enabling the business to 
5.	Identify and eliminate redundancies & bottlenecks - reducing change risk 
6.	Visualize performance of current and proposed processes 

Why a centralized platform?  HBOS agreed that establishing shared processes would result in improved complaints handling and the centralization of key functions, like mail handling.  A shared platform would provide a more cost efficient form of management, a single combined strategy, a shared upgrade path and divisions would be able to focus more on their individual business needs without the distractions of platform support.  Having shared resources would provide an efficient and effective development process, would allow HBOS to leverage the lowest cost provider, using offshore partners with onshore management and would result in a shared process knowledge.  In addition, establishing a best practice and governance on a single platform would create expertise shared across the organization by providing it from the center.  Strong governance processes would also ensure the platform would remain stable and operational.  By adopting a common platform strategy and a SOA approach, architecture simplification  would make it easier to separate business process logic from product and presentation logic, thereby enabling the diverse user groups to be more agile in catering to their specific requirements. 

Scalability was also a key consideration for HBOS.  They were looking for a long term solution and therefore needed a solution that could scale with HBOS.  After evaluating several vendors, without a doubt, TIBCO Software Inc. provided the technology and the ability to grow with HBOS vision.

Finally, an integration capability, which allowed business processes to access and act upon product data and business rules was key to the successful completion of the HBOS SOA. TIBCO has proven to be very capable at integrating with existing HBOS infrastructure, platforms and services.

Yes

Yes

The BPMS Core platform offers a truly multi-tenant (SaaS) architecture for the divisions of the bank. The platform offers:
* Faster time to market, since business processes can be automated much quicker as HBOS standard services, such as security and regional calendars, have already been implemented.
* Reduced cost of entry, since the upfront investment has provided all the core software, hardware platforms and user licences.
* Lowered risk as divisions can re-use business processes which are already operational.
* Consistent approach to BPM, leveraging shared services across divisions while allowing customization where needed.
* Future proofing for automated business processes since tool vendor specific details are isolated to the BPMS platform.
* The document management service built on the platform streamlines workflow and enables the bank to reduce the number of document processing locations.
Benefits from this project have been felt on both sides, the business side and the technology side.  Business users and management have acknowledged the benefits like the rigorously controlled processes, rollback, shorter deployment times, easier training, consistency of service and most importantly, especially for a bank during these economic times, consistency of compliance with regulatory processes.
The provision of real time MI via dashboards and reporting suites is one of the areas where the business is most excited. The ability to track work throughout the process and be able to measure against SLAs is key to achieving the kind of efficiencies that would be driven through the centralized provision of shared services and the effective use of outsourcing. 
Another benefit is that managed processes provide is consistency from the point of view of a common customer experience across multiple channels and brands.   Customers can expect to receive the same service irrespective of the time of day or who answers the phone or whether youve come in through one part of the business versus another.  Examples may be the way HBOS will handle checkbook requests, which will be standard no matter how you contact them or what type of account you hold, or a credit limit increase, whether through the web or the phone will get a consistent answer from HBOS because a standard process with defined rules will be followed.  This was a critical issue before, especially in the banking industry with regulatory compliance and the need to have consistent documented policies. What HBOS is replacing is a system that used to tell you the next steps but not how to do it, and did not enforce key regulatory actions.
The next stage in exploitation of the technology will be to integrate with other systems to complete steps automatically, or at least provide an integrated user interface across applications required to complete a process, therefore assuring consistency in service.  This will make doing business with HBOS easier and more predictable. 
From the technology side, HBOS IT has realized the dramatic cost savings of the central platform and the opportunity now is to look to consolidate existing work/process management applications onto the core platform.  It also allows HBOS to maintain a shared expertise and a simplification of their systems architecture. 

For the initial implementation, HBOS IT built a new, automated process for handling failed direct debit payments. The existing process had many manual steps and required agents to consult a number of separate applications. The new TIBCO-based process automates the steps required to identify missing payments, notify customers, follow up, and resolve the issue with minimal human intervention. We achieved straight-through processing for nearly 60 percent of cases, and freed up over half the department staff to focus on delivering enhanced customer service, says Frost. We also reduced the number of call backs from customers, bringing us closer to first-call resolution. It was a very successful demonstration of the power of BPM to automate processes, enhance customer satisfaction, and increase efficiency.

In the banking industry this was an ambitious project in which companies like TIBCO Software which has been in business for 13+ years and has established a long relationship with customers in the Financial Services industry, had not seen. Equally, HCL had prior experience of establishing integration centres of excellence with client organisations. However, this was one of the first examples they had seen where a bank has set out to establish a central platform and capability to support the development and implementation of enterprise wide process automation.
HBOS IT brought together decentralized divisions of a large banking institution all of which already had their own BPM strategies in play, one home grown (Retail Banking), one with AWD (Corporate Banking) and the third a much older implementation of TIBCO Staffware, Viewstar and a homegrown desktop application (Insurance & Investment).  Not only did they get them to agree on the project requirements but each division committed dedicated project managers to be fully engaged in the project and agreed to standardize on a platform strategy. This was an aggressive endeavour for any large company in any industry, but the right investment. 
"We believe our TIBCO / BPM implementation is unique because it is not a point solution designed to automate a specific process, but an enterprise platform that will increase efficiency for all of our organization's divisions and provide a platform to enable them to fully exploit the potential of process simplification and automation."  Andy Haywood, Head of Application Development and Application Management, Group IT, HBOS.
The vision to provide a disparate but fully integrated collection of technologies, capable of handling input in a variety of forms and from different channels, recognizing the content of that input, store it in a Information Management platform and then route it into BPM and land on the right desk, potentially anywhere in the vast HBOS enterprise, is the key factor which makes this Programme unique.

Unusually for a project of this magnitude, technical issues were the least of ITs worries. The key challenges were agreeing to funding levels and Programme timelines across the many contributors, and obtaining the best and most appropriate resources.  HBOS IT were aware of the skills problem from day one and planned from the start that they would outsource the technical expertise for the program, rather than build a development capability which would only be required once. They overcame this barrier by the appointment of HCL to do the major architectural, technical design and development work along with the focussed deployment of TIBCO Professional Services as an assurance service and to design some of the more critical services and the physical deployment architecture.
There were geographical hurdles as well.  With three business divisions involved in this project, the team was spread across three cities in the United Kingdom:  Bristol in the South West, Edinburgh and the core IT team in West Yorkshire. When HBOS contracted with HCL, they added one more location to the mix, Bangalore, India.

Among the most challenging issues were organizational, given that the programme encompassed the central platform design and build and two divisional deployment projects. HBOS' experience in running massive programmes was brought to the fore here with the creation of an enterprise wide programme team.
Richard Frost and Sundar Mudupalli, AVP of HCL, attribute part of the success of this project to one of the first days of their relationship, the trip HBOS IT took to India.  They quickly established an understanding of the project within HCL and received a level of technical assurance that HCL had the technical expertise that HBOS required. A clear benefit of the visit was the face-to-face relationship with the offshore team of developers and architects.  In addition. HCL was able to provide teams on-site in the UK.  One of the key elements that helped bring the divisions together was the project manager on the HCL team, who was key in providing continuity with the HCL team and the HBOS organization. He was key to overcoming day-to-day issues and laid the groundwork for an effective co-location of the IT groups.
In addition, TIBCO was key to the success.  The TIBCO software was new to HBOS, so according to IT deciding to bring TIBCO PSG in to do the implementation was money well spent.  The implementation ran smoothly connecting the required systems, therefore being one of the first proof points to the cross division team that the project was could meet their joint project requirements.

Getting agreement across the divisions was the most difficult part of this project but also the biggest achievement for the team.  Unique to the normal mode of doing IT projects at HBOS, this team decided not to try to do everything themselves and to create a cross divisional team. 
Bringing divisions together and getting agreement was challenging since every group had their own agendas and requirements.  Communication across the divisions, the functional teams, the in-house IT teams and the outside vendors, TIBCO and HCL was the key reason this project was successful.  No one was left out of owning a piece of the project, no one was excluded from understanding the goals of the project, the status of the tasks or the responsibility of addressing the issues.  Driven by a Steering Group from the very start of the project, communication was not lacking.  The group was comprised of dedicated Business Sponsors from each division, the various core functional groups of HBOS IT, TIBCO and HCL. They met monthly as a group to set direction, addressing issues and making key decisions.   The engine that was driving the project was the next level down that fed into the Steering Group, the Programme Level.  With daily communication and active involvement, this team kept their respective groups informed and focused on their piece of the project. 

Achieved

HBOS IT has achieved what they set out to do, create a platform that can be utilized by the various divisions of the company but they know the unlimited potential of  what can be done on this BPM platform.  The vision of what can be accomplished goes way beyond what their internal users can envision today. 
Taking this one step further would be integrating this with third parties. For example the annual business reviews done in Corporate Banking.  This requires investigating loans or overdraft accounts and other services which are associated with HBOS and their customer.  Ideally the BPM platform has the capability to trigger automated emails to these third parties requesting the appropriate information thereby decreasing the time it takes today to process an annual review and reducing the resource costs to manually contact these vendors.  The BPM platform not only makes this possible in a consistent way but also in a measurable way. 
HBOS realized before this project started that the rest of the world is moving on-line and they need keep up.  Without this technology they would have bigger challenges receiving electronic communications, responding to them and reacting to the customers in the manner that they are conducting business electronically and quickly.  The future expectation of responsiveness to an evolving digital banking world is what HBOS IT is enabling their organization with this unique BPM Platform.

HBOS has now moved into the exploitation phase of the project, pushing their platform past the initial goals.  The challenge for this team now is to get their internal customers to think about their business, their processes, their resources and ask the question can this be automated?  
The conversations have already begun.  For example, the Corporate Banking division has purchased what they believe is a Workflow and Image solution.  The BPM team is now showing their users the further capabilities they can achieve with the BPM platform:  simplify processes, reducing daily costs, be able to utilize resources more effectively and probably one of the most important points for users  control to make changes with little IT interaction.  
Today this division has documents that are arriving, being manually scanned and routed to the right business process.  The next step is start investigating the automation of this highly manual workflow.