ArcelorMittal Foundation, Brazil

Executive Summary / Abstract

ArcelorMittal Foundation (AMF) is an organization created to carry out ArcelorMittal’s private social investment actions, for the sake of those communities wherein the Company has industrial units. The Foundation develops its activities in 48 municipalities, through 14 social programs in the fields of education, health, environment and culture. As a result of its BPM initiative, within the cultural field, 100 percent of their project proposals can be submitted and evaluated via electronic forms. This represents an increase of 50 percent in the number of project responses. Also, a 50 percent reduction in the time to evaluate each proposal was achieved. As a result of this BPM initiative, which included a tightly integrated SOA environment, a new and improved AMF system was launched called the “CTRL Cultura” system.

Overview

The AMF has always had a strong background in managing cultural projects, but was becoming challenged with being able to adequately manage the increasing volume of project proposals sent by cultural agents. Along with the volume of transactions came a corresponding large amount of legal documentation and controls required each step in a cultural project evaluation process. During the period from 2004 to 2007, the foundation invested approximately $30 million in cultural initiatives (sponsorships, events, grants, etc.). The systems used in the past were not integrated and required the use of paper, combined with manual labor. In fact, the process of registering projects used to be done by the cultural agents in printed forms and then input into a database. All cultural project monitoring was done manually, looking for information on different systems and sources.

Business Context

A Process centric culture was a goal for the entire organization as a strategy to leverage its competencies in supporting cultural projects with an impact in the society. This was the primary “business” goal for the company and the Foundation. Practically speaking, AMF experiencing some low volume of projects evaluate due to excessive amount of manual work required reviewing each proposal. The previous processes had breaks in the flow work. For example, Project submissions needed an in person presentation by the social agent(s) and separate static databases were applied to manage the information. Basic issues existed with the number of people that were required to review projects and with the complexity in managing all project data internally, through a combination of independent databases and paper files. These constraints had limited the capacity to adequately select the most relevant cultural project proposals. The small team responsible for project proposal analysis were visibly a bottleneck in achieving the actual process goals, including responding to all requests to social agents in a timely fashion and selecting the best projects.

The company realized that the quality of the accepted projects could be increased if the company were able to select the best cultural project proposals in a faster, more agile manner by the standardization and automation of their processes. The company expected to continue to see a rise in the number of project proposals and knew it needed to optimize their processes in order to respond to requests in a timely fashion. Some of the other challenges identified:

  • Need for a process-oriented collaborative platform for managing cultural projects within the Foundation.
  • To promote project agents interaction through a common platform, thereby enhancing the flexibility in the procedures necessary to carry out a cultural project.
  • To provide a 100 percent web based platform.
  • To enable the orchestration of all foundation activities in a transparent and dynamic way for management.
  • To reduce the processing time for projects.

The Key Innovations

Business

In 2007, AMF management decided to redesign its organization based on their Cultural Investment Policy with the aim of expanding access to goods and services, by training and qualifying leaders and artists of the communities served. It was established by the Culture Committee, composed of representatives from different areas of the company and by the Culture and Art department of the foundation. After the consolidation of the Cultural Investment Policy and the implementation of the Culture Committee, The AMF proposed the creation of a cultural management system, which represented all automated processes using BPMS technology.

Process

The combined system allowed the foundation to design and automate more than 18 processes, shown in the Figure 1, which controls all cultural management programs, and which resolved numerous problems: Sponsorship via tax incentives; development of artistic events that stimulate support of new values; developing programs in the different cultural areas, as well as expressing many of their cultural policies and their strategies; and using the independent Business Rules System offered by the system. Thus the organization would be creating the necessary workflows to integrate their employees and projects (Cultural Committees, Marketing and Communication Areas, Relationships with Institutions, etc.), by creating its collaboration environment using an Intranet portal, its website and also simplifying the user experience by providing process driven communication through the use of the email system. It would also provide some alternatives for their partners to receive tasks or check the status of their submitted projects. Within this collaborative environment, all information can be shared, including: Agendas, Documents, Tasks, Forums, Reports, Activity Monitoring, etc.

In Figure 1, a high level model is showing the combination of processes created to support all activities in an end-to-end mode, defined by the AMF team and the external BPM consultants. AMF has used the BPM platform to perform the ASIS analysis for each process in all levels of detail. The AS-IS models were then optimized by achieving all the TO-BE processes with the ability to document and retrieve different models version into the BPM platform.

As shown in Table 1, during the AS-IS and TO-BE analysis, many key areas for improvement were detected. The total automation of the process as a result of end-to-end detailed process definition was helping to highlight the primary activities within the different processes that could be optimized by avoiding manual work, paper, and the ability to directly involve the social agents into the process for cultural project management, from data submission to project conclusion.

The BPMS technology applied offered a flexible run-time environment, for immediate exception handling, and the use of declarative business rules that avoided the use of programming code. The entire process automation itself could be developed using zero programming code, resulting in a significant time reduction for delivering the process automation during the technology implementation phase, and also providing flexibility for changing the process “on the fly”. Due to the fact that the BPM technology adopted did require coding, and the model could be put into direct execution mode with no human intervention; business people and process experts with no programming skills could be directly involved with automating the processes. Consequently, the IT people could focus on the SOA implementation and allow the business team to concentrate on the processes. AMF was able to achieve a high level of commitment throughout all organizational levels as a result of these BPM platform characteristics.

Table 1. Process Summary: Partnership Management (Cultural Projects).

  • Social Agents
  • Cultural Project Analyst
Mega Process – Operation- Partnership Management for Cultural Project
Starts on Proponent data received
Ends on Cultural Project Closed
Case for Action
  1. Lots of documentation required and being managed with paper. Too difficult to store, control and maintain all required documentation
  2. All work with expected response time being performed manually and not accurately.
  3. Lots of time demands for retrieving and joining all project data from different sources.
  4. Project Data missing.
  5. Project Data lost.
  6. Rework often required due to the need to resubmit a new project analysis for approval.
  7. Fewer projects evaluated per year.
  8. Lack of visibility of the project execution.
  9. Low rate of projects success.
Vision
  1. Social Agents should be able to submit all data in a 100 percent web environment to reduce the time for processing the gathered data.
  2. Real time visibility could provide an ability to control the workload and to optimize the time for managing all phases of cultural projects.
  3. Reduce cycle time for gathering project data.
  4. Improve the data accuracy by eliminating missing data.
  5. All in a central database to facilitate control.
  6. Need for automatic documentation generation.
  7. Need to reduce the time for project approval.
  8. Eliminate in person presentations by presenting all project proposal data in a paperless manner.
Actors
Tools
  • Isolated databases
  • Paper
  • Manual work
Metrics
  • No. of project proposals received/year
  • Total time for new project data
  • Total time required for retrieving project data
  • No. of projects responded to per year
  • Total # of projects received/number of evaluators

Figure 1: High Level Model of the processes automated in the AMF BPM Initiative. Source: AuraPortal/CSY.

High Level Model

Figure 2 shows the main challenges faced during the process mapping activities developed at AMF. The company realized that flexibility would be imperative in a day to day manner for adjusting the strategies and actions based on any compliance issue or need for reducing operational costs at the Foundation. The visibility in a real-time fashion was a promise of the BPM technology, and for this reason, AMF understood that process visibility combined with information generation for the decision making process could be the key for agile change eventually applied to the processes in a continual process improvement model. The unification of all data in a single, common database was critical also, due to the need for a more dynamic data management for retrieving data and managing all process indicators in real time.

Figure 2. Process Challenges, Implications and Alternatives.

Challenges

Organization

Once the BPM initiative started and after getting familiar with the methodology, the technology, and all people involved, the stakeholders decided to adopt a high level of commitment to BPM as a discipline. All people within all organizational levels understood that the process driven approach was the best way to achieve the defined goals of the AMF in supporting its initiatives. They improved visibility during the process mapping phase, and understood the need for cross functional processes which were critical success factors for achieving the goals of the BPM implementation. In addition, all the social agents from different types of social organizations were able to participate by providing feedback in how processes were modeled and how they could be executed. They were an integral part of the project.

The social agents and the AMF employees needed some training and education in the BPM technology implemented; something that was managed in a very positive environment because all stakeholders had participated in all phases of the BPM initiative. A major challenge could have been the assimilation of the changes from a chaotic way of doing things to a process driven approach for managing cultural projects with a real time visibility of all steps of the processes cycles. As a result, AMF prepared a “marketing campaign” to promote the new system which resulted in a very effective and efficient tool for convincing people to embrace the new process-oriented focus adopted for managing projects with BPMS technology. A training program coordinated by the process architects to the final users was critical in terms of making people understand how the new processes work and also for increasing their commitment in using the new system. The AMF has also created what they called “the process office”, a team created by the BPM leaders, internal and external, for collaborating in process optimization and expanding the use of the BPM technology with all organizations involved.

Hurdles Overcome

During the different phases of the BPM initiative in AMF, all process leaders were concerned about achieving a good level of commitment and involvement from all people within all departments. The main challenge was to convince all levels of management of the necessity and value of the BPM implementation to the organization. Due to the high level of investment in cultural projects, the Foundation was not able to fully guarantee that such investments would provide the expected. In order to address this issue, the BPM leaders rolled out a series of workshops and meetings for “selling” the BPM initiative by justifying the initiative in terms of investment and time needed to complete the implementation. On the business side, typically, a Foundation is not the core center for budget allocation due to the need for doing more with less. This is something that put a strain on the discussions in terms of the budget needed for the project. The BPM leaders justified the project by assuring a low investment to short time return ratio. Also, AMF had to define some specific KPIs for evaluating the performance of their initiative which is typical for a normal business, but less so for an organization such as theirs. Therefore, they relied on external consultants to assist with this issue. From the beginning of the implementation it was difficult to explain to people in general, the need for a process definition that reflected all interactions across all levels of the organization. People normally know what they do in their own jobs, but they don’t always notice what activities occur before or after they finish their task, or what the impact of their work is on others throughout the company. To assist with this issue, AMF and the consultancy firm organized some workshops to illustrate how each employee fits into the process, and how they impact others.

Benefits

Due to its systematic approach for the BPM initiative, AMF achieved a high level of integration of all information related to individual cultural projects, and was able to manage the projects efficiently and collaboratively across the organization. The ease of operation processing sponsorship request , analysis, selection, monitoring and the evaluation of the results of projects, enabled the organization to operate more efficiently and select better quality projects.

As for some of quantifiable benefits achieved by AMF, there was a significant reduction in the execution time (50 percent) in the analysis of projects, and with 100 percent of the proposals generated in electronic format, the evaluation and response times were reduced significantly. The organization was also able to increase the number of proposals analyzed with no need to increase the number of employees.

Many indirect benefits were also achieved as a result of the BPM implementation at AMF. A process-centric culture in the day-to-day work in the Foundation was established and different resources were able to interact on the same platform, including internal agents of the Foundation and external constituents, using different channels like the use of email to interact with processes, public web and the common interaction platform. The newly automated system called “Ctrl-Cultura” offers accessibility in real time to all of the information required by any member of the team involved in the management of a project, which brings faster response to problems that may occur.

One interesting benefit was the ability of the new system to generate Key Performance Indicators using a specific process to orchestrate the process data in the system. At the same time, the system can retrieve and consolidate data from an external system within a separate platform for all automated processes related to the sponsorship requests, their analysis, selection, monitoring and evaluation of the results of the project, enabling better decision making when evaluating projects.

Full integration of all AMF applications involved in the processes, including the automation of the tasks performed by different systems and people, were orchestrated by the BPMS engine resulting in one Business Information System for handling Projects. (Their System Tasks - automatic - drive the communication with the rest of the Programs using the Web Services that can be invoked in real time for all information from the BPMS system).

Metrics Description Before BPM After BPM Cost Savings
No. of project proposals received/year No. of project proposals correctly received and recorded. 714 1525 120 percent
Total time for new project data entering Time required to create new project proposals records in the system 1 day 15 minutes 300 percent
Total time required for retrieving project data Time required joining all documentation (legal, authorizations, etc.) for project analysis or checking. 30 minutes 1 minute 50
percent of projects responded per year Total of projects responded/Total Project proposal received * 100 50 percent 100 percent 50 percent
Total No. of projects responded/number of evaluators Productivity evaluation per month 12
(5 people)
42
(3 people)
40 percent
Table 2. Quantifiable results: Cost savings, Time reduction and Productivity increase. Source: AMF.

All quantifiable benefits are summarized in the Table 2 and AMF itself is subordinated to ArcelorMittal headquarters in Brazil and their mission continues to be striving to do more with less, as mentioned before. The AMF entity appears in the ArcelorMittal financial accounting system as an expenditure or cost, as it is difficult to show a tangible return on any investment due to its non-profit nature within the company structure. For this reason, AMF had always been driven to optimize their entire operation in order to make their initiatives totally supported within the tight parameters of the company budget. As a result, AMF decided to implement the BPM and its technologies to improve its efficiencies. By achieving these improved results, the Foundation is contributing more with the same budget, and all stakeholders can see all processes along with their real-time status, and grant financial approval for any project based on a pre-defined business rule, which directly contributed to the results presented in the Table 2. The ability to evaluate more projects in less time was responsible for reducing not only cycle times but also costs related to the paperless approach, and the reduced labor hours and manual activity. At the same time, with the goal to select cultural projects proposed by agents with the most interesting ideas, the Foundation could significantly improve the company’s visibility in the social arena. This was something that was not possible in the past, but totally achievable now, since the company can involve more social agents, evaluate their performance, and have better control over selecting the best projects to support.

Best Practices, Learning Points and Pitfalls

As a result of the AMG BPM initiative, the organization was able to generate best practices and learning points on:

  • The creation of a process committee to validate all BPM initiatives and new major optimization planned.
  • The creation of a knowledge base for the entire company process architecture and cross-functional interactions starting with the use of Process Maps as shown in the Figure 1.
  • Methodology applied for process automation and process improvement acquired as a result of the involvement of the consultancy company responsible for the implementation of the BPMS platform.
  • Total and direct involvement of the social agents (including external constituents) into the process centric approach embedded in the daily AMF activities. Dynamic process change is critical for an agile process driven organization and BPM technology must provide that in an easy manner.
  • The involvement of the business people and process owners in the process of automating processes, using the BPM technology was critical to reduce the time to deliver the expected results.

Some of the Pitfalls identified were:

  • Avoiding modeling and automating isolated process in a clear lack of cross-functional view.
  • Lack of commitment in all levels can jeopardize the success of such an initiative.
  • It is imperative to set target numbers (metrics) before and after the process automation because at the beginning, it can be difficult to convince the stakeholders to develop ROI analysis or to extract some actual metrics for their processes.
  • Expending lots of time design the technological solution. The BPMS tools must provide reduced time cycles for automating all organization processes.

Competitive Advantages

Social responsibility is a key goal on the corporate business strategy at the ArcelorMittal.

The company is totally committed to develop all initiatives that represent the respect of to the environment protection social growth. On its region, all companies in the steel industry have a strong social and environment commitment with the society. ArcelorMittal and its Foundation in Brazil were pioneers in embedding BPM initiatives and technology for improving their social and cultural sponsored projects, recognized by local communities and government, and started to be used as an example of corporate social responsibility, which started to be followed by their competitors in the same way.

AMF achieved the lowest-cost operation compared to competitors, a benchmarking in this sector. The organization became a reference for all foundations in this marketplace. At the same time, the company plans more process optimization for cost reductions by diminishing time as a way to guarantee and to increase its budget in this area and to increase their market visibility.

Technology

AMF was looking for a BPM technology oriented to business people and process owners, some experiences and tests with other tools revealed that a more coding intensive tool could cause the costs and time to increase substantially. AuraPortal was the BPMS platform selected by AMF to support their BPM initiative by automating all required processes in all required areas. AuraPortal is a global BPMS (Business Process Management Suite) provider, delivering a solution that creates Business Process Workflow Execution Models without the need for IT programming. The platform is totally Web-based and for this reason the organization was able to create a multidisciplinary team from different areas: the people in the foundation, the IT support team located in other facilities and the consultancy company as well. It was integrated with existing systems using web services technology, Adapters Server Connectors, in SOA environment, importing tools and many types of systems tasks to perform automatic activities. Consequently, AMF could design processes that combined people and systems all reflected in the models. The Figure 3 shows the different tools used for performing the required integration between different systems.

Figure 4. Process life cycle steps used in the BPMS solution.
Source: AuraPortal

Process Life Cycle

Figure 3. AuraPortal BPMS Architecture. Source: AuraPortal.

General Layout

The implementation of a BPMS system within the AMF and its proposed approach, orientated towards SOA and Process driven solutions, also included Business Rules, Document Handling, Intranet/Extranets, and the public website for internal and external users interacting in real time as shown in Figure 4, supporting communication and collaboration. As part of the requirements of the AMF, the project covered all steps spanning a cultural project; from the initiation of a request, through the management of a proposal to the conclusion and evaluation of the results and the impact of each cultural project on the Foundation. Also, a life cycle process management component was applied as part of the BPMS system approach for process automation as shown in the Figure 4.

The SOA approach was adopted to perform the required integration between different applications and platforms in both directions by leveraging the tools shown in Figure 3. Some specific Web Services components using SOAP protocol were created to provide different methods of invoking procedures directly within the processes modeled in the BPMS solution. As a result, there was “zero” point-to-point integration and the Web Services could be reused in all processes configured in the BPMS software. At the same time, additional ready-to-use Web Services were leveraged to automate some required transactions. The fact that a process start message could be transformed into a Web Services request with no need to develop code was critical in gaining improved time-to-delivery of the solution. One important requirement during the implementation of the BPMS system was the need for providing flexibility for users to interact with processes activities using flexible collaboration environment. In this sense, the selected technology offered multiple possibilities for creating Extranets, use of the public organization website and also the support for a process workflow by having the email system, where social agents could receive tasks on their email boxes with the information, prioritizing, link to the electronic forms in any mobile device. An example of these different environments is shown in Figure 5.

Figure 5. Collaboration Environments for Managing Processes.
Source: AuraPortal.

Collaboration Enviroments

The Technology and Service Providers

AuraPortal was the BPMS technology used the AMF BPM project. AuraPortal is a global BPMS (Business Process Management Suite) provider, delivering a solution that creates Business Process Workflow Execution Models without the need for IT programming. More info on: http://www.auraportal.com

Core Synesis was the consultancy company responsible for all services applied to the AMF BPM initiative. Core Synesis is an AuraPortal partner. More info on: http://www.coresynesis.com.br

AMS (ArcelorMittal Systems) was responsible for all infrastructures required for the implementation of the BPMS system. More info on: http://www.bms.com.br

© Copyright: This case study was originally published in the Excellence in Practice series in the book entitled “Delivering BPM Excellence” Get the complete book in both Digital (download PDF) and Print Editions at http://futstrat.com/books/Delivering_BPM.php published by Future Strategies Inc.

Nathaniel Palmer
Author: Nathaniel PalmerWebsite: http://bpm.com
VP and CTO
Rated as the #1 Most Influential Thought Leader in Business Process Management (BPM) by independent research, Nathaniel Palmer is recognized as one of the early originators of BPM, and has led the design for some of the industry’s largest-scale and most complex projects involving investments of $200 Million or more. Today he is the Editor-in-Chief of BPM.com, as well as the Executive Director of the Workflow Management Coalition, as well as VP and CTO of BPM, Inc. Previously he had been the BPM Practice Director of SRA International, and prior to that Director, Business Consulting for Perot Systems Corp, as well as spent over a decade with Delphi Group serving as VP and CTO. He frequently tops the lists of the most recognized names in his field, and was the first individual named as Laureate in Workflow. Nathaniel has authored or co-authored a dozen books on process innovation and business transformation, including “Intelligent BPM” (2013), “How Knowledge Workers Get Things Done” (2012), “Social BPM” (2011), “Mastering the Unpredictable” (2008) which reached #2 on the Amazon.com Best Seller’s List, “Excellence in Practice” (2007), “Encyclopedia of Database Systems” (2007) and “The X-Economy” (2001). He has been featured in numerous media ranging from Fortune to The New York Times to National Public Radio. Nathaniel holds a DISCO Secret Clearance as well as a Position of Trust with in the U.S. federal government.

More articles from this author