Hy Cite has a pretty good idea of what’s cooking. Doing business under the name Royal Prestige, the Madison, Wis., company markets kitchen equipment, flatware and more. But 10 years ago, it decided it needed to kick its paper-based manual credit check system up a notch.
Back then, a single order generated up to five pieces of paper, including the credit application and supporting documentation. At the time, Hy Cite was processing 1,800 orders per week at the time. Each set of documents got stapled together in a packet that was routed to five or six different departments, including order entry, verification and fulfillment.
“Orders were impossible to find because they were shuffling from department to department,” recalls Arin Brost, Hy Cite’s senior vice president of operations.
That changed when Hy Cite implemented document imaging and workflow software for its business process management initiative: The company now processes 5,000 orders a week. “We are much more agile,” says Brost, who declined to disclose what the company paid for the software. The original contract covered about 50 seats; the company now has 150 and hopes to add 50 in 2008.
With an assist from BPM, Hy Cite has boosted its net earnings per full-time employee fourfold. Sales have also gone up by a factor of four, to more than $125 million for 2006. And orders processed per week have jumped 2.5 times from before deployment to 2006.
It hasn’t been easy, and not just because of cultural changes needed to leave manual processes behind. Hy Cite’s BPM vendor, Global 360 as it is now known, has been tossed from owner to owner. In April 2006, Boston private equity firm TA Associates led a $200 million buyout of the company from Dallas-based eiStream, the owner from 2000 through 2006.
“We always believed in the product,” Brost says. “It was really open in its architecture, and we could do a lot of development around it.”
It also helped that many of the vendor’s original staffers transferred to each new iteration, giving Brost fairly consistent customer care.
While Hy Cite uses Global 360’s document imaging and workflow tools, the vendor also offers G360 Enterprise BPM Suite, which spans from process control and execution to modeling and infrastructure components. The average selling price is $125,000.
Ben Cody, Global 360’s vice president of product management, splits his company’s engagements into two broad categories: pilot and transformational. By “pilot,” Cody means a first step into the BPM waters, an implementation for automating a back-office function like accounts payable or claims processing.
For a transformational project, Cody points to a federal agency, which he declines to identify, that is automating its system for providing grants to education. Cody says the process allows applicants to put their grant proposals up on the Web and have them reviewed in real time for missing information, helping the agency process proposals faster.
Another customer, Screen Actors Guild-Producers Pension & Health Plans, is using G360 Enterprise BPM to manage and streamline its claims processing. The Burbank, Calif., organization, an intermediary between SAG and the television and movie producers that employ its members, processes 60,000 medical claims a month and has $2.7 billion in pension funds under management.
SAG members get their benefits if they earn more than $20,000 in a given year, which means that the pension and health plan unit must track every dollar of their earnings from every gig. It also needs to account for all payments from TV and movie producers, which fund the system.
Seven years ago, the organization decided to purchase Global 360 software and integrate it with a legacy system written in the DEC Basic and Cobol programming languages and containing claims and pension records.
Chief information officer Nader Karimi says that while all claims once needed to be reviewed by humans, the Global 360 rules engine now adjudicates 60% of the claims. “Everything on Global 360 is Java-based with a Web front end, so it integrates very well with our architecture,” he adds.
Whatever the changes in the business process management market, Global 360 plans to keep on turning. As Cody puts it: “We will be a consolidator instead of a consolidatee.”