The state of the BPM value proposition—and of BPM suites

Editor's Note: In this two-part interview, ebizQ Contributing Editor Peter Schooff has a wide-ranging conversation about BPM issues with Neil Ward-Dutton, co-founder and research director of MWD Advisors. Dutton, a regular contributor to the ebizQ Forum, is among Europe's best-known IT industry analysts. Here, in Part I, Schooff and Ward-Dutton discuss BPM value propositions and the status of BPM software. In Part II, Ward-Dutton shares insights and tips about process-improvement success, along with a few BPM predictions.



PS: To jump right in: What's the value proposition for BPM today?

NWD: It's kind of multi-sided. Many people, when they look at BPM, think primarily in terms of the things we're taught to think about, specifically through methodologies like Lean or Six Sigma. So they focus primarily on [the idea that] BPM can help you become more efficient and improve the quality of the work that gets done in your organization. And that's absolutely true—as far as it goes.

But we do a lot of research that's based around case studies, going in and interviewing adopters of this stuff, and figuring out what works and what doesn't work and why. What we've found is: That's not the end of the value proposition. Yes, quality and efficiency absolutely [are important goals], and we've got loads of good examples of organizations that have done really, really significant things in those areas.

But there are other levels of value that organizations can get from doing this. One is around what some people might call "innovation"—really improving how you deliver products and services to customers, and how you make promises to customers around those.

So in an environment where we have globalization driving extreme competition in many markets, and driving faster and faster change cycles, [it's important to have] the ability to compete not just on cost, but also on delivering a great customer experience, giving people interesting new ways of interacting with products and services, [offering] new kinds of service bundles, being able to enter the market quickly with new concepts and new ways of presenting services and products, and so on. Those things are fundamentally important for many companies.

If you look at retail, travel and transportation, consumer packaged goods, financial services, telcos—lots of different sectors have these kinds of challenges, and we find that BPM can really help there, too.

So there is absolutely value in being able to improve knowledge and control over processes, to improve the way you deliver products and services to the customer, and to improve the customer experience.

On top of that, we also find some companies using BPM work to make their business models more flexible. That isn't about the individual efficiency or quality of one area of work. It's not even about the kind of customer experience or innovation in terms of products and services. This is about making the entire company structure more agile, and making it possible to make more educated, more fine-grained decisions about sourcing—[addressing the question] "What do we do ourselves, and what do we give to another provider to do for us?" BPM can really help in those kinds of situations, too. We've seen a number of organizations get value in that kind of business-model flexibility.

PS: How has that value proposition held up for companies today? Can you provide some examples?

NWD: There are a significant number of companies who've done some very significant things. One example would be an insurance company here in Europe that has gone through a two-year BPM exercise and has delivered the ability to increase their volume of business well over 30% without investing in any more staff. They've also managed to vastly improve their customer satisfaction. That's just one example. Many others, across different industries, can attain somewhere around a 30% to 40% efficiency increase, and also an agility increase, which can have a very significant impact.

But it's not just a question of buying a product, installing it, and then everyone goes and has a party because suddenly your business is 30% more efficient. That's not how it works.

In the area of BPM, like in other areas that are business-facing—think about collaboration, social software, or think about business analytics and business intelligence—it's not just a question of technology. Yes, technology is important; it's an enabler. But what really enables you to get value is some degree of organizational change and cultural change.

There are companies who just go into this thinking, "Okay, we'll just buy that product and then everything will be cool." Unfortunately, those companies buy a product and everything isn't cool. They end up with something that's very, very limited in its effectiveness.

So the value proposition has held up pretty well for some companies who realize that this isn't just about buying a tool and just doing a bit of agile development. For companies that realize that this is about changing the way that people approach business, as well as some technology implementation work, there's actually a pretty high success rate. But overall, there are numerous examples of companies who have taken a very techno-centric approach and who are really struggling see the results that they were hoping for.

PS: What exactly is your take on the future of the BPM suite [BPMS]?

NWD: [Cites the impact of "Business Process Management: The Third Wave," by Howard Smith and Peter Fingar (Meghan Kiffer Press, most recent edition 2006)]. It was, a very, very influential book. They talked about a BPM suite—I think they originally called it a BPM system—as being like a DBMS, database management system. They tried to get people to think about business processes and their business process models like data models, and [the idea that] you needed a system to manage them.

Then, through some work done by another analyst firm—a big one, beginning with "G,"—that kind of morphed into the BPM suite. The idea was that you had a kind of one-stop technology shop, an integrated set of tools that would cover everything from design through to deployment through to operation, and then monitoring, and then change management, in this kind of continuous cycle. That has been very, very successful as a vehicle for people to implement the technology side of things in BPM.

This really appeals to a lot of the early adopters. Where we're at with BPM now, I think, is that stage where we're moving out from the early adoption phase to more of a mainstream phase. [Meanwhile,] this all-in-one integrated set of tooling may not be proprietary because it may support standards like BPMN [Business Process Modeling Notation] or BPEL [Business Process Execution Language]. Or it may support kind of SOA principles, so it may have a lot of the IT architecture "tick boxes" filled. So many of these things are kind of unusual in the way they're put together.

If you look in any other area of IT, having one suite of things, one product that does everything from analysis and design through to development and deployment, and then the runtime, and then a set of monitoring tools, and change management tools, all in one integrated system— frankly, that freaks a lot of people out. They're not quite sure what to do with this.

So as this enters the mainstream, we're finding that the idea of the BPM suite isn't as attractive to the mainstream audience, in many cases, as it was to early adopters. That's not to say that the BPMS is dead; I think that's probably overstating the mark a little bit. But even if the tools remain integrated and companies who provide this continue to bring out integrated set of tools, the way this is marketed is changing. That's a good thing, because as we get into the mainstream market-adoption phase, people need a slightly different approach.

You're already starting to see this. You’re seeing some vendors now talking about different kinds of use cases, or entry points, into BPM. Some people talk about more of an analysis or a process-intelligence kind of entry point. Other people will look at a transformation entry point, an end-to-end re-imagining-of-your-processes kind of entry point. And others will take more of an application-development-focus entry point, which is quite tightly scoped and is just about a particular, very specific, part of your business that you want to change.

Underneath the covers, you may end up actually selling and using the same bit of technology. But the marketing of these things as BPM suites is going to go away. We'll hear people talking about more distinct and separate use cases for the technology and different ways of getting on board. I think that's a good thing, because the truth is that where we are right now, people do approach this from different angles. Saying "Well, actually, what you need is an all-in-one suite of stuff"—that doesn't wash with many people when you're in the mainstream. They want stuff that's going to fit their needs.

In Part II, Ward-Dutton shares insights about process-improvement success, along with a few BPM predictions. Both parts of this Q &A were excerpted from a more in-depth ebizQ podcast on BPM value, trends and technologies. The content has been edited for length, clarity and editorial style.

About the Author

Peter Schooff is a former contributing editor for ebizQ, where he also managed the ebizQ Forum for several years. Previously, Peter managed the database operations for a major cigar company, served as writer/editor of an early Internet entertainment site and developed a computer accounting system for several retail stores. Peter can be reached at pschooff@techtarget.com.

More by Peter Schooff

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