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This post is the third and concluding part of my predictions for 2008. In the last 2 posts, I have described how the flood of new technologies in recent years is causing some apprehension among business people. Many remember how hard it was to measure ROI from (for example) ERP - and some remember implementations in which ROI was conspicuous by its absence. How much more complex will it be to measure ROI on BPM+SOA+BRM+CEP+BAM+BI+Mashup+add_your_new_type_of_product_here?

In particular, it is not yet at all clear what is involved in the administration of these new technologies. For more on this, you may be interested to read my latest column on BP Trends, in which I discuss SOA governance from a human perspective.

The crux of the problem is that major software vendors are addressing a technology stack, not a business stack. Recent acquisitions by hard-core technology companies such as Oracle and Sun have reinforced the popular impression that new technologies are aimed squarely at improving core IT operations, not wider business operations. To many business people, technology vendors fail to supply anything that might address their key concerns.

In particular, any disinterested observer of global business must notice immediately that the main thing happening to organizations of all sizes and types is outsourcing. Mom-and-pop-shops are not just outsourcing their book-keeping but also their services, traditionally a core offering of a small organization. Blue-chips are outsourcing their manufacturing, warehousing, logistics, ... you name it. HP has been outsourcing printer design for many years now.

When talking to outsourcing vendors while in India recently, I was struck by the maturity of their business approach. They have come to understand very well what works and what doesn't, and the argument for working with such partners is becoming almost irresistible. So for many business people charged with delivering cost savings and business improvement, a key way forward is Business Process Outsourcing. This means that the main activities required in 2008 are as follows:

1. Process Architecture. Chunk up the organization into a network of co-operating processes - strategic, tactical and operational - and decide which of these should be the current focus.
2. A Wider Vision Of Choreography. Work out the interactions between these processes, and hence which ones can safely be outsourced. What shall we do? What shall our partners do?
3. Total Cost of Ownership. For those processes that are left over - and only those processes that are left over - assess the validity of streamlining them an IT-based implementation. In particular, how can we optimize the IT operations necessary to administer new solutions?

TAKE AWAY

For many people, 2008 will be about process architecture. This is not the same as process mapping. Architecture tells you what processes you have and what the relationships between them are - mapping tells you the steps in a particular process. There are various techniques for process architecture, but the only one based on the realities of networked organizational activity is Riva - though use of Riva does require some care.

The true value of process architecture for many organizations will be that it leads on to a wider vision of process choreography, a vision encompassing a lot more than technical notations such as WS-CDL. In the end, why implement what you don't own? For more details, take a look at the GOOD methodology.

And when you finally decide to implement a process, how do you do it as cheaply as possible? Anyone who has been around a while knows that Total Cost of Ownership depends fundamentally on the ongoing administration costs - and current IT administration frameworks do not go far enough. ITIL tells you what you must do, and COBIT tells you how well you are doing it, but how do you define and implement your processes for IT administration?

Since IT administration is carried out by humans, the missing link here is Human Interaction Management, facilitated by a new breed of lightweight and low-cost tools: the Human Interaction Management System.

2008 may well be the year in which business people start getting true value from technology - by using less of it.

PS: If you would like to hear further explanation of these ideas, I discussed them during a recent ebizQ podcast with Elizabeth Kratz and other writers for this site.

Posted by keithhb in Business Process Management |Digg This|Add to del.icio.us

Posted by: Offshore Outsource Solution at January 27, 2008 11:44 PM

Posted by: Brice at January 29, 2008 07:08 PM