The Business Process Management (BPM) technology market is taking off. Why do I believe that? Because it is no longer being viewed as just another three-letter acronym.

In fact, the business case is driving the uptake in this particular technology. Analyst group McKinsey confirmed recently that companies are recognizing the importance of BPM in helping to meet new corporate governance requirements such as Basel II and Sarbanes-Oxley. BPM does this by providing enterprise-wide visibility of business processes and giving organizations more control over their core functions. It is fair to say that toughened regulations will drive this whole industry over the next few years.

Support for regulations is just one factor though that has made BPM into a $550 million market today, and one that over half of the CEOs polled at a recent BPM conference predict will grow by over 30% in the next five years. There are strong strategic reasons behind this kind of optimism; it isn’t a sign that companies are spending blindly on IT. Far from it.

Spaghetti Systems

It became obvious a few years ago that businesses needed to make a major change in the way they used information technology (IT). Over the last decade, organizations had built up a mixture of “bespoke” and packaged applications in response to changes in the business structure and strategy. A combination of corporate restructuring and mergers, together with the pressure of market forces, meant departments and processes had to be automated and linked together. Unfortunately, this created a largely disconnected spaghetti of systems and applications. BPM was born from a strong need to streamline internal processes and connections between both internal and external functions.

The good news is that BPM is not an order to “rip and replace.” Quite the opposite -- it enables companies to get value out of their existing IT investments, such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems. More importantly though, it gives organizations the ability to monitor, manage, and manipulate processes quickly in response to changes in strategy and market forces. This level of control and flexibility brings cost savings and avoidance, revenue generation, and improved service and delivery to customers. Good BPM systems therefore provide in-built EAI capability, as demonstrated in Metastorm’s implementation at Fiat, where the BPM system is tightly integrated with the existing purchasing systems.