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Reinforcing FLEXibility of SMEs by dynamic business process management

Final Report Summary - REFLEX (Reinforcing FLEXibility of SMEs by dynamic business process management)

Executive Summary:
Achieving business flexibility is a necessary precondition for the business development of European SMEs, especially nowadays due to the wide-known adverse effects of the lasting global economic crisis. The business flexibility implies flexibility in the underlying ICT infrastructure and business processes. Moreover, in the current climate, SMEs also need to achieve flexibility in an affordable way, being well aware of the widespread need both for cutting/freezing of expenditures as well as for achieving the biggest possible returns on existing assets. Business process management (BPM) is a class of software which directly contributes to enterprise performance by driving operational excellence and business flexibility. However, current solutions for BPM are tailored to the needs of large corporations, are expensive, and drive mainly technology flexibility, and not necessarily, business flexibility. ReFLEX contributed to strengthening the competitiveness of the participating SMEs by developing a new BPM model tailored solely to the needs of the SMEs allowing them to be continuously aware of the changes in their environment and to change/adapt accordingly in order to keep the business processed running on the high performance levels. Indeed, in that way SMEs increased their responsiveness to the new business opportunities (or threats) which is a crucial feature for the business development (even survival) for small fishes in a big ocean of the globalized economy. In order to realize the dynamic BPM, which is now called the ReFLEX Software Solution, a substantial research was performed on the new model for the description of (ad-hoc) dynamic business processes (which now constitutes the ReFLEX Framework Specification). This included the development of a novel workflow engine that executes ad-hoc processes as well as calculation of changes on the fly, in real-time. Finally, the ReFLEX Consortium developed and validated the business models for its four participating SMEs, which are envisaged in the four versions of the ReFLEX Software Solution (CIM, GAMA, VAJO, and INVEST).
Project Context and Objectives:
The ReFLEX project idea was based on the need of the SMEs for more agile and adaptive business processes in order to thrive in today's competitive market. Therefore, small and midsize organizations need to be agile, responding quickly to changing market conditions and exceeding customers' demands. Unlike large corporations, SMEs can rarely lean on globally recognized brands for multiple pragmatic reasons, and consequently, a lost customer, or a missed opportunity to recruit a new customer, may never be recouped. Accordingly, SMEs need to find unique ways of differentiating their offerings and turning their small size into a big advantage. The ReFLEX project contributed to the idea that by remaining flexible, SMEs can react faster to changing customer requirements than their larger, less agile competitors. Therefore, achieving business flexibility is a necessary precondition for the business development of SMEs, especially throughout the last couple of years due to the lasting global economic crisis, largely evident within the Eurozone itself, and at least as much in the Associated Countries. The business flexibility implies flexibility in the underlying ICT infrastructure and business processes. However, in the current climate, SMEs also need to achieve that flexibility in an economically affordable way. The ReFLEX Framework provides a set of solutions for this vital task, aimed at largely increasing SMEs’ flexibility.

The ReFLEX project was mainly focusing on the research of Business Process Management (BPM) paradigms and was searching for and developed solutions suitable to the very needs of SMEs. BPM is a class of software that treats processes as assets that directly contribute to enterprise performance by driving operational excellence and business agility. Within the ReFLEX context, the goal of BPM was to manage operations consistency and efficiency by modelling and automating an organization's core business processes, including technologically integrated ordering, distribution and warehouse management, vehicle fleet monitoring and management based on GPS, human resources coordination and more. These processes are usually static and vertically-structured within the SME community, making them relatively easy to document, model and automate using a divergent set of complementary software technologies and management techniques which are deployed within the ReFLEX Framework. The technologies and techniques include: business process mapping, value stream mapping, geographic information systems (GPS), complex events processing, and more.
Project Results:
The main scientific and technological result of the ReFLEX project is an integrated ReFLEX Framework based on the integrated ReFLEX Software Solution, along with the four customized ReFLEX solutions (one for each of the end users of the project). Each customized version of the solution consists of several components and services which are all integrated into the holistic ReFLEX Framework. The components that comprise the ReFLEX Framework are:

• EDM (electronic document management) desktop application and web portal event-source add-on;
• CRM (customer relationship management) desktop application and web portal event-source add-on;
• CORE (planning tool) desktop application and web portal event-source add-on;
• WMS (warehouse management system) desktop application event-source add-on;
• GIS (geographic information system) system event-source add-on;
• ReFLEX sensors
• ReFLEX adapters
• PubSub Broker messaging server
• CEP (complex event processing) component
• BEAM (recommendation tool) component
• ReFLEX UI web portal – integrated user interfact

Besides the listed components, there is a lot of background services and additional user interfaces that enable proper functioning of the individual compontents of ReFLEX Framework/integrated Software Solution.
EDM, CRM, CORE, WMS and GIS components are used as event source applications for feeding the ReFLEX System with information about the ongoing end user business processes. ReFLEX sensor and ReFLEX adapter components detect changes and extract data from these sources, and send them on to the PubSub Broker. The PubSub messaging server is used as a main communication channel of the integrated solution. Its routing functionalities enable efficient exchange of XML messages between the project components. The CEP engine represents the advanced tool for developing a set of methods for recognizing the need for a dynamic change in business processes, while BEAM provides a set of methods for calculating and recommending what kind of changes should be performed (immediately, real-time) in order to exploit the emerging business opportunity or to avoid a possible threat. A novel workflow engine of the BEAM component is able to perform changes in a running business process instance, whilst its SAN editor provides the user-friendly graphical modeling environment of reactions to business situations by using situation-action networks (SANs) - an ECA-based hierarchical model. On top of that, the ReFLEX UI web portal integrates all the other ReFLEX components UIs into one holistic framework, by enabling centralized login to the system as well as by providing additional functionalities for displaying recommendations and their notifications to the end-user managers and employees.

The ReFLEX project has focused the research on several technological fields which were identified as relevant for providing beyond-state-of-the-art results. Primarily, the project proposed the research in modeling dynamic business processes and investigated the logic-based event processing framework for adaptive Business Process Models. Furthermore, the research was conducted in order to achieve service and process flexibility; in particular the declarative approaches to modeling adaptations in service-based systems were investigated. A recommender service was developed which is triggered by detected complex events and which provides suggestions that guide end users on the alternative service execution paths. Furthermore, ReFLEX has challenged state-of-the-art in complex event processing and devised techniques that are able to process event streams in real time and identify values that do not follow general trends.

The Deliverable D6.2 which is publicly available provides further details on the achieved technological progress beyond state-of the art in modeling dynamic business processes, achieving flexibility and real time complex events processing.
Potential Impact:
The ReFLEX project proposal was submitted under the FP7-SME-2010-1 Call, the aim of which has been defined as “strengthening the competitiveness of SME participants and contributing at programme level to improving industrial competitiveness across the European Union”. The expected outcome defined in the Work Programme 2010 included “new or improved products, processes or services with a distinct market potential, demonstrating clear economic impact for the SME participants, improving their competitiveness by creating new or expanding existing markets.”

ReFLEX was organized in such a way as to achieve the above-stated impacts, through its main goal which was focused on increasing competitiveness of European SMEs’. The Consortium, which encompassed the four European SMEs that have directly benefited from the achieved results, performed the activities which provided tangible results that created the following impact: Contribution to the real-time responsiveness of SMEs and improved operational capacities for the ever-more changing European and global markets.

The ReFLEX Software Solution, implemented in the participating SMEs (+ two more external SME stakeholders) brought measurable improvements in their real-time responsiveness. The solution was applied to managing transportation and logistics business processes in the four SMEs and has enabled: real-time perception of a change in the regular business scenario (such as, the possible delay in realizing the work planned for a particular machine which is needed at particular time on another location, as described in the INVEST use case scenario; Deliverable D4.4) which has triggered the analysis of the new situation and the possible solutions of the problem, as well as the recommendation of the optimal solution suggested by ReFLEX in real-time. This has further brought improvements in planning the transportation and logistics processes, change management, optimization of operational costs and customer satisfaction for the participating SMEs.

Social impact: The improvements brought by the ReFLEX Software Solution and new dynamic business model have positively impacted the customer relations and customer satisfaction levels, particularly in case of VAJOMAG and INVEST. The social implications of those impacts involve the improved companies’ image and reputation among the existing customers, being an excellent reference for the potential future customers as well. The companies are working on positioning themselves as the customer-oriented organizations, providing efficient and highly responsive/proactive services, and therefore, ReFLEX has helped the SMEs reshape their business approach and become truly flexible companies.

Contribution to the “green” economy: The established flexible process flow has created the opportunity for SMEs to optimize energy consumption: by being able to change the execution of a process in real-time and thus create energy-saving opportunities. The ReFLEX Software Solution enabled the participating SMEs to reduce the fuel consumption, which directly impacted the CO2 emissions reduction, by making an optimal choice for performing transportation processes. For example, in case of the VAJOMAG return order scenario (as described in the Deliverable D4.3) the merchandiser who receives the information that a customer wants to return a part of an order delivered does not have to send the new truck to pick up the returned goods, but may accept the ReFLEX recommendation and decide to slightly change the route of an existing vehicle on the field, thus kill two flies with one shot –pick up the returned goods, while saving the fuel, money, time and enabling the “greener” process flow.

Economic/financial impact: The commercial exploitation of the ReFLEX Software Solution was not conducted during the project course. Nevertheless, the expectations for positive economic impact for the participating SMEs is in further enhancement of their business activities through commercialization of the solution, meaning sale of software licences, provision of technical support, maintenance services and other segments of ReFLEX product/services portfolio which is initially presented in the D5.2 Exploitation Plan Report. As an early exploitation result, the Consortium managed to perform the successful implementation of the the ReFLEX Software Solution at the two external SME stakeholders, one from the food and beverage distribution industry and the other from the services industry.
List of Websites:
The public website address is: www.ReFLEXforSMEs.eu.

The contact details of the Project Coordinator are:

CIM Grupa d.o.o.

Mr Bratislav Stoiljković

E-mail: bratislav.stoiljkovic@cimgrupa.eu

Phone: +381 18 456 6500, 456 6540

Address: Knjaževačka 21,
18000 Niš
Serbia