BPM

According to an article on BPM from NewsFactor.com the acronym, “stands for Business Process Management, as well as Business Performance Management, depending on whom you ask. Either way, BPM can be defined as a tactic that combines software and policies with the aim of streamlining process flow among departments in order to improve communication and efficiency.” In the increasingly complex world of business, where the focus is on doing more with less, any application that can pinpoint sources of inefficiency would appear to be a shoe-in. However, despite the benefits that the evolving field of BPM has to offer, the adoption rate for BPM suites is surprisingly small; Tom Manley, senior vice president and CFO of a leading BPM application vendor, Cognos, says penetration is currently only at about 20 to 25 percent, with the concentration in large corporations. Things do appear to be changing though; “A number of marketplace surveys show that BPM has risen high on lists of projects championed by CIOs, up to first or second on IT priority lists,” notes CRM Buyer; and more than one source has suggested that we are near the tipping point for BPM.

BPM represents an evolutionary shift from the Business Process Reengineering (BPR) movement of the 1990s, where the end result of an implementation was a single, often large-scale, renovation from one static state to another. Such efforts frequently failed, if not immediately then over time, because by the time a new system was in place it was either already outdated, or did not account for the need of flexibility. In its article, “Giving Your Business a BPM Boost”, NewsFactor.com notes the change, saying that earlier “efforts tended to focus on a one-time overhaul, similar to changing all the systems in a house and then forgetting about them until something breaks. With BPM, there’s a deeper sense of continuous change, acknowledging that communication is constantly evolving, and needs to be developed and tweaked regularly.” Just as BPM evolved from BPR to handle continuous change, it is now itself adapting to the new business environment; and this is a large part of the reason its penetration into the market is expected to grow.

BPM suites which once were focused on static and structured work elements, repetitive processes such as expense-report entry, validation and payment, new customer enrollment and claims processing are now moving into the realm of unstructured environment. However, according to KM World, which recently ran several articles on BPM, “The majority of work is performed within the unstructured-or dynamic-environment of emails, phone calls, instant messaging and face-to-face meetings.” Therefore the future of BPM lies in, “Dynamically modeling the processes within this unstructured world, and providing visibility and control where there has traditionally been none;” this “is the ultimate destiny of BPM.” Further “It will be through this evolution-capturing and codifying information about dynamic work, and then serving as the business context backbone for complementary applications-that BPM suites will be successful in realizing their true potential.” The true potential of BPM to businesses is, “on par with the widespread adoption of email.”

According to CRM Buyer, the BPM community, analysts, consultants, and vendors, site a few key reasons for the currently low rate of BPM adoption. Chief among the impediments is cost and time. For many smaller corporations, and those without deep pockets, the cost/benefit ratio has still not yet proven; at the current pricing many simply do not feel the need for the sophistication that BPM solutions provide. CRM Buyer also suggests that the BPM community sees compliance issues such as Sarbanes-Oxley, Basell II, and HIPAA, as well as the heightened emphasis on quarterly and year-end reporting, as a distraction; responding to regulatory pressures has impeded companies’ ability to be proactive. Both these challenges may soon prove less of a hurdle.

Forrester Research predicts that the price barrier for BPM products will fall, “we expect human-centric BPMS vendors will follow their integration-centric BPMS peers and sell individual components, lowering the barrier to initial adoption of their products. We anticipate this trend will drive incremental growth for the human-centric BPMS vendors by an additional 1 percent per year over the forecast period [2009].” In addition, Forrester notes the positive impact of compliance on BPM adoption, “SOX, Basel II, HIPAA, and other regulatory mandates will drive demand for both integration-centric and human-centric BPMS software by an additional 2 percent per year more than the forecast period. BPMS solutions are particularly well suited to support compliance mandates with their ability to control the execution of business processes, insulate processes from potential tampering, and provide extensive audit trails for monitoring purposes.” What once held back adoption may soon encourage it.

As for the market forecast, both Wintergreen Research and Forrester Research see growth. Both had the BPM market at just over a billion dollars in 2005; Wintergreen expects the market to reach $3.8 billion by 2012, and Forrester anticipates that by 2009 it will be already have reached $2.7 billion.

A more complete version of this posting, with journal articles, and research reports can be found at the website of Analyst Views Weekly.

More information on this topic can be found in the IT Services section of the Software, Computers, & Services Market Intelligence Center.

And in the following articles:

Maximize Business Performance: BPM: The Real Challenges
DM Review, February 2007
Articles on the challenges of business performance management (BPM) usually focus on selecting the right product and getting it properly implemented. While it is true those tasks are fraught with risk, the greatest BPM challenges have little to do with technology. One of the biggest problems with performance initiatives is the lack of an easily quantifiable ROI. We know that having more efficient processes, cleaner and more consistent data and tools for better decision-making will most likely lead to bottom-line improvements.

Process, Process: Business Process Management for All
Redmondmag.com, February 2007
In these days of doing more with less, solid process development and management is less of a luxury and more of a necessity. So it should come as no surprise that business process management (BPM) has been getting a lot of attention of late. Both Forrester and Gartner have recognized BPM vendors — one Windows-based and one open source — in their market reports.

Giving Your Business a BPM Boost
NewsFactor.com, January 31, 2007
One of the most important ways a BPM application or approach can help a company is simply to focus its attention on an area where it may have been lacking in the past. Implementing BPM can be the catalyst for positive change when companies are facing problems such as lackluster sales, poor customer support, or employee dissatisfaction.

Who Needs BPM? Many CFOs Aren’t Convinced
CRM Buyer, January 16, 2007
For all the talk and vendor marketing Email Marketing Software – Free Demo pieces pushing business performance management (BPM), with its promise of integrated data, there are still a lot of CFOs and chief information officers (CIOs) who apparently need convincing. Tom Manley, senior vice president and CFO of Cognos, one of the BPM software market leaders, told an investor conference recently that “market opportunity” penetration appears to be no more than 20 to 25 percent.

High-Speed Business Processes
Manufacturing Business Technology, January 2007
Anyone struggling to understand the business value of a service-oriented architecture (SOA) should have a chat with David Berry. Berry is CIO of New York City-based Coty Inc., the world’s largest fragrance manufacturer. He says installing an SOA helped Coty accomplish three major business goals in less than six months.

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