**Editor's Note: Interested in how process management can have an immediate impact on the bottom line, then you cannot miss ebizQ's upcoming Virtual Conference 'Business Processes and the Bottom Line.' Click here to continue.
Listen to or download the 9:38 minute podcast below:
What follows is a transcript of my podcast with Michael Lees, Senior Director at Software AG. Michael is a core member of Software AG's BPM Leadership Team, and in this podcast we take a quick look at all the changes going on in process management as a quick preview to this Wednesday's virtual conference, Process Management and the Bottom Line.
First of all, how has the BPM market evolved over the last 12 months?
So we've seen quite a lot of maturity in the market over the last 12 months, actually, probably more in the last 12 months than we've seen in the previous two years. We've seen a lot of our customers and prospects moving from what I would call tactical BPM towards what I would call enterprise or strategic BPM. So a lot of customers have been doing fairly low level, single process projects within departments using BPM tools, often fairly light on the technical, often just using business process analysis tools, or business modeling tools.
And we've had a lot of success, which is great. And a lot of these companies now have had success with multiple processes and multiple departments. And what they're tending to do is, is tending to get the notice of senior management and board level within some of these organizations who are now looking at what BPM can do from more of an enterprise perspective and more from a cross department and cross functional perspective.
So that's creating quite a lot of interest in BPM from a much broader perspective. And when you look at it at that perspective, it suddenly becomes more than just sort of modeling as is processes, optimizing them and deploying new processes. The demands on the infrastructure becomes significantly heavier.
The integration requirements become significant heavier so we're seeing more and more customers looking at the SOA infrastructure and strategies hand-in-hand with BPM to support that more enterprise level approach. We're also seeing more and more customers looking at the methodology side of the equation and focusing on things like process governance.
And we've had a lot of interest in setting up BPM Centers of Excellence, it's something that we're specializing in now as a company and supporting our customers as they move along the maturity curve. And we're seeing that BPM run more and more on the desk of the CIO as well. CIOs now are talking about processes, they're seeing it as common language where they can meet the business halfway and getting better communication and collaboration around the work that they're doing.
And they're also seeing it as a way of taking IT off the critical path. CIOs are increasingly frustrated by having conversations with the business based purely on cost, they want to add value. And BPM is a way of them really shifting the age-old problem of spending 80% of their time on maintenance, and 20% on innovation on new capability development, and they're switching that equation around and actually having a conversation with the business based on value.
What impact does BPM have on existing package applications and on the package application's market?
So it's definitely complimentary. One of the things that we promote fairly heavily as an organization is that BPM and SOA give you the opportunity as we say to leave and layer your existing architecture. We're certainly not talking about rip and replace here.
Your existing applications whether they be sort of more traditional legacy applications or recently purchased packaged applications all do their job reasonably well and all address functional elements of fend-to-end processes effectively. The real need that we're hearing from the market is that CIOs have made this investment over the last 20 years in their legacy systems, and their ERP systems, in their packaged applications, and they now want to fill in the white spaces they say or as I would put it, taking them the last mile.
And many of these packaged applications aren't really built to recognize end-to-end processes; they're stove piped functions so they're not built for process. Many of them aren't really built for people. The people who are actually doing the process work often have to learn the intricacies of multiple backend systems to get their job done so they're definitely not built for people.
And they're definitely not built for this new generation of workers that are coming into the workforce that demand a much simpler user interface, a much more collaborative approach to the way that they do work. And finally, they're not really built for change. Delving into multiple packaged applications to implement a change in response to a business requirement is what has led IT to be in the problem that it is in at the moment with this ball and chain of maintenance.
So if you look at those three things, you end up with an application environment where your existing application - packaged applications and legacy applications form the foundation of your BPM infrastructure and now you have this abstract layer, which is built for process. It recognizes the end-to-end value chain.
It is built for people because you can now build these user interfaces that abstract from the complexity of the underlying environment in a more - recognize more the context to the individual worker what they're trying to do, where in the value chain they're to do it. And finally, they're much easier to change.
You're exposing these flex points from the underlying architecture be it business rules, be it the actual process logic, or be it the UIs themselves. You're exposing these flex points which are much easier to change whether its IT changing them, or the business changing them, they're easy to change them than they were before so building for process, building for people, building for change.
We're not replacing applications, we're leveraging them and extending them and a lot of vendors are starting to look at things like process frameworks. And these packages of assets, which as organizations are looking at new applications they can now look towards BPMS, more as an application development environment, seeding that environment with some core assets that are relevant to their industry or their process, and helping them build out these new capabilities.
How is Software AG taking advantage of BPM, and by that I mean within the company?
You have the great question and one that we get all the time. We're out there evangelizing BPM and talking about the benefits. And if we weren't actually taking advantage of that internally, then we'd look fairly hypocritical. But we do have a significant effort underway and have done for some time and we're very strong believers across our product groups and solutions if eating our own dog food.
So probably, if I could highlight sort of three or four that we're involved in at the moment for the most significant one is around Global Sourcing. This is actually part of a big initiative to develop a global purchasing organization within Software AG across the various regions strongly supported by a common set of processes and a strong technology enablement.
So establishing a worldwide purchasing organization, getting transparency over various commodity purchasing groups across those regions, and ultimately having a very strong impact on our margins and we've been doing this now for awhile. We're close to achieving our goals on this and it's looking to have a very significant impact on the bottom line through those standardized purchasing processes.
The second one is a project we call Deal Desk Approval. One of the challenges we have an organization that does a lot of sales and has a large sales organization across the world is that the actual approval process for deals, especially large deals, is fairly manual. And what we find was that the sales representatives were spending a lot of their time managing the approval process rather than doing what they're good at which is going out and making sales.
So we've automated the workflow of the approval process to get a consistent approval process across all the regions globally. It gives us increased transparency as to where various deals are up to. It speeds the process along, frees up the sales guy to go and make sales. And overall, it's having a big impact on our visibility and management of the sales cycle once the customer has actually decided to move forwards.
The third one is in our HR group on new hire process. We're using BPM to standardize the new hire approval process, part of a bigger on boarding process within our HR organization. And again, managing what was a fairly manual and ad hoc approval process, making sure that it's paperless, automating as many steps as possible, and getting it compliant with the standard internal process.
And then finally, one significant project is around our Solution Center. So we have a fairly significant Solution Center within the company where our sales engineers and our professional services organization check in and checkout demonstration environments, proof of concept environments, various assets to support the sales cycle and support the solutions they're working on with customers.
There's a core team of about four or five people who manage that Solution Center. Again, it's very manual the way that they manage new demos that are built, new assets that are created and checked into the environment. They have to be approved, they have to be cleaned, they have to go through various processes.
We're automating that and also automating the reservation process when sales engineers want to checkout various demos or get them hosted on their environment using VMware, or burned to a DVD and shipped out. At the moment, that's taking a significant amount of that team's time managing that overall process so we're automating the workflow around that and automating as many of the steps as possible and getting visibility into which demos are being used more regularly, which SE are using which demos so its transparency and compliance.
So those are the four, Global Sourcing, Deal Desk Approval, New Hire Onboarding and Solution Center Management. Those are the four sort of - they're at the top of listing in terms of our current efforts.
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