Student Loan Service Masters BPM

In its first decade, elm resources succeeded in building a popular system using software as a service (SaaS) to track and manage student loans. But two and a half years ago, executives at the not-for-profit organization realized that its ELMNet system was in danger of failing as it groaned under its burgeoning transaction volume and left dissatisfied customers in its wake.

Now, thanks to an overhaul of its business processes with BPM middleware, ELM Resources is on track to have a new ELMNet system operating by mid-2008, which company officials hope will save millions annually and boost customer satisfaction. Working with 1,600 schools and 1,800 banks, the Oakland, Calif., organization handles one-third of all loans.

ELMNet is composed of two parts: A loan transaction system that’s designed to perform system-to-system interaction between banks and educational institutions, and a loan inquiry system that lets financial aid officers look up all the loans that are part of a student’s financial aid package.

When ELM Resources was launched in 1994, its founders thought ELMNet would serve only five banks and no more than 60 schools. As the system caught on, upgrading ELMNet to handle more banks and schools became more difficult. “It didn’t scale. We had to tamper with the entire system when we made a change or added a new customer,” says Marshall Edgison, ELM Resources director of application development and support. New customers chafed at the time it took to add them to the system. “We wanted to make it quicker for customers and less expensive to run and manage,” he says.

The first step was to for a team of business analysts, systems engineers, customer support staff and salespeople to document on paper the original antiquated ELMNet system, a process that took six months. The team put the information about ELMNet’s business processes into the ARIS Business Modeler, one in a suite of BPM middleware products from IDS Scheer. The ARIS Business Modeler is intended to allow a businessperson to graphically describe business processes and can be expressed in BPEL (Business Process Execution Language) code, which programmers can use to build complete applications. BPEL also specifies business process and business interaction protocols; this helps programmers express processes as Web services.

ELM Resources is calling on IBM Global Services, which has dispatched 15 employees to help design, deploy and monitor the new ELMNet application. In addition, IDS Scheer sent a consultant, who was later hired by ELM Resources to train in-house staff in the use of the vendor’s products.

Besides the ARIS tools, ELM Resources is using a number of IBM WebSphere software products, including Portal Version 6.0, Process Server, Application Server, Enterprise Service Bus and Integration Developer; IBM Rational tools for application development; and IBM Tivoli software for monitoring ELMNet’s performance.

Edgison estimates the $14 million project will generate savings of about $2.5 million annually in IT maintenance costs, and by making it faster and less costly to add new customers to the system.

Another benefit of the business process overhaul is more efficient regulatory compliance, by including key regulatory procedures in the workflow. “You can see where things are. That’s useful for audit and compliance,” says Gartner analyst Jim Sinur. ELM Resources must comply with the Gramm-Leach-Bliley Act, which defines privacy rights for consumers of financial services institutions. And because ELM Resources’ banking partners are subject to the Sarbanes-Oxley Act, ELM Resources must comply with the provisions of that law as well.