Listen to my podcast with Connie Moore, Vice President and Research Director at Forrester Research. Connie will also be chairing Forrester's first Business Process and Application Delivery Forum, coming this October in Washington, DC, and in this podcast we discuss the latest in BPM, including optimizing the ROI of BPM, as well as how BPM can revolutionize customer service.
Listen to or download the 9:48 minute podcast below:
PS: A lot of people have been saying that 2010 was the year of BPM. How would you say it's going so far?
CM: I think it's going great. I would say it's going gangbusters in fact, particularly, in light of the economy. And I think that we have to talk about it in two ways: there's BPM the discipline and then BPM the software market. So BPM the discipline, we have launched at Forrester a council for the top executives driving business process in 1B+ companies and we've had just dramatic uptake of that offering that allows people to get together and discuss their issues, challenges, and successes with peer groups. And from those discussions, you can see that business process management the discipline aligned with LEAN and Six Sigma is really going great.
Then if you look at the software market, you see some really dramatic results being reported by vendors. So a lot of people say the pure play market is dead and over with but if you look at Appian, for example, they had growth in orders of 58% in 2-1 over 2-4 of 2009, and I think that's because of their cloud based offering. In 2-2, their orders grew 43% over 2-1. Pegasystems has similar results. Let's see, their first quarter in 2010, the revenue increased 20% and you're seeing similar results from vendors like IBM so I think you have to say it's going really well.
PS: Now, in this current economy, companies are obviously really looking for an immediate return on their BPM investment. What would you say is the best way to make that happen?
CM: Well, I think that for companies that are just doing process modeling, it's time to move on and do some automation because modeling only gives you interesting theoretical information, it doesn't add anything to the top line or the bottom line. So the low hanging fruit is automation and companies that are looking to get business benefit whether its cost savings, or greater market penetration, greater customer service, go for looking at areas of automation. If you've already done automation, you should move to the next level, which I think is trying to have process consistency.
I'll give you an example. A very large global financial services company had call centers in 40 or 50 locations and each of those call centers did their processes differently. Now to a certain extent, you have to do that because of local laws and regulations as well as customs but underlying the process should be the thing. And so you can get tremendous cost savings just by looking for that consistency across processes.
PS: Interesting. Now a lot of companies have been through automation and they're also now considering -- what can they do about ad hoc processes? What do you recommend?
CM: Well, I think one of the really bright spots in the business process management software market is what Forrester calls dynamic case management. So if you look at what companies have done, they have automated the straight through processes which is great because -- and if you can get 70%, 80% of the instances of customer interaction and so forth done without human touch, that's fantastic. The remaining parts of the process often have been invisible so I think that lots of times companies have semi-automated processes instead of fully automated them.
And the reason that it's been invisible is that for so long anything had to do with phone conversations, e-mail, looking up documents, sharing documents was just kind of shunted off to the side but that's where really hard work is, that's where we're spending a lot of money, and that's where the high value is to customers. And so I think we have to go back and look at processes with fresh eyes.
We call them untamed processes; they're processes that we thought were automated. But when you go back to them, they're not, they're still very unruly and we need to overlay with a new kind of BPM that's much more designed for people with all the social elements and the content elements as well as built for change to support business rules in a really strong case management underpinning.
PS: Now I know Forrester is covering this on the upcoming forum. How exactly can BPM help revolutionize customer service?
CM: I think that's a great question and the reason is that organizations today are very focused on their customer facing and their customer impacting processes. It's all about increasing customer satisfaction, grabbing more market share, moving the needle on top growth and BPM does have a major role in customer service. So you look at how we've tackle customer service in the past, we put in packages that mainly allow us to focus on the data surrounding the customer, the data around the interaction with the customers, and so it's a very data-centric business application.
And what's missing is the process element and then the predictive element when you put predictive analytics with the process element. And so we need to grow beyond just a data repository about customers to being able to take actions, automate those actions, and make sure nothing falls between the cracks, and to make sure it's integrated with social, and then we have a predictive element to the processes as well. So in some ways I think you can look at some of the customer service applications as doing their job but needing more and that's where BPM is an overlay to that and I think that can really change your customer service processes.
PS: Now, what do you see for the future of BPM?
CM: Well, I believe that cloud based BPM offerings have just really grown at a tremendous rate. I think that's what Appian is doing is riding that trend. And the reason it works is that a lot of business process professionals, the majority of them, sit outside IT and they become very frustrated with how slow IT goes, particularly if IT is bogged down with a big ERP or CRM implementation. And in the past, all they could do is just be frustrated, but now they can actually go and get a cloud based BPM offering so I think that that's a giant trend.
More social integration with business process management is important and in many different ways that that can play out. One is more of a social discovery piece so that when you're figuring out your to-be process you have much more of a social element to that activity. And then, you can have move social integrated with the process as that executes so more in the automation level. And I guess we could have social as well on the optimization and looking at processes to see how well they perform. You could have a social element there as well although I haven't seen vendors talking about that as much.
I mentioned the overlay on enterprise apps when we were talking about customer service. I think that's true across the board. One of the conundrums that organizations have is that they want to move fast but they don't want to move fast when it comes to their ERP deployments. Now I asked one of our ERP analysts why some of the ERP vendors went so slowly on some of these major trends, and he said it's because their customers want to go slowly. And I think that's probably true if you're responsible for these big enterprise apps suite deployments.
But at the same time, business people want to go as fast as they possibly can and one way you can do this is by using a process layer that sits on top of increasingly legacy business apps. So I think that is a giant trend as well for BPM and it all goes well for the future in terms of market growth and acceptance of this as a major category of software.