BPM is more things to more people today as a range of providers
offer solutions of varying stripes.
By Marcia Jedd
usiness process management (BPM)
is coming of age. Its objective, in
rheory, is to manage processes from
initial creation through continuous
improvement. According to one online FAQ,
BPM encompasses any means of identifying,
documenting, monitoring, improving, and automating a business process using IT.
Examples of key business processes include
procurement, product development, production, order delivery, distribution, and customer
support. If done rij^ht, BPM assists in improving ovcriili quality and reducing errors, resulting in internal efficiencies, cost reduction, and
much-coveted customer satisfaction.
To be sure, BPM constitutes much of the
l>chind-the-scenes order and brains behind
many an empire, in part, because it folds in
business rules. Within the financial services,
insurance, government, and a host of other
regulated or service environments, activities
like claims processing, expense processing, asset and knowledge management, and compli;ince depend on BPM in one form or another.
Bruce Silver, an independent analyst with
lil'MS Watch, emphasizes that BPM isn't a system of records, hut rather the framework iiround
processes and activities. "It stiil uses your SAP
system, for example, or other exisdng systems
to perform the work. It may even hold data on
a temporary basis." Ultimately, Silver believes
BPM typically manages these areas:
• basic workflow: forms routing, for example
• production workflow: shared cues, advanced rules of assigning work to people
march/apnl 2QQ1 26
In order to get the benefits of BPM,
analysis, execution, and monitoring
need to be performed at peak
• colliiborative processes: around unstructured processes,
but nor necessarily high volume (areas like new-product
• case management: mortgage loan processing, life insurance underwriting, for instance
• straight-throiif;h processes: automated processes wherein
only exceptions are worked on by humans.
According to Silver, BPM helps with the gap of "hand-offs
between these stovetops," or disparate departments and functions where companies often lose efficiencies. "An easy way
to get started is to model your core business processes," Silver says, which is more effective with process-modeling tools.
This modeling is typically performed by business analysts and
can go deeper with simulation analysis, one area where BPM
tools are particularly invaluable.
Silver recommends that enterprises consider a BPM solution
based on the level and extent that the business side of an organization and the IT side will work together on the implementation. "What will drive you to work with one set of vendors
or another is whether you favor the programmer-oriented approach versus something that is more model driven."
Indeed, depending on how an enterprise incorporates BPM
into their actual business processes and their IT in relation
to process modeling. Silver suggests there's a diversity in offerings to address these differences. "It differs greatly from
product to product," he says. He notes solutions such as those
from IBM maintain very distinct roles between the business
end and IT with "clean hand-offs" between the business and
IT versus other solutions that are very collaborative in how
they perform process modeling, such as Lombardi.
Silver suggests it really boils down to how an organization
wants its business processes and IT to work together. "Some of
these tools are very IT programmable towards Java developers.
The trend is toward zero or very little code now," he says.
Focus On People
While BPM manages human-to-buman, human-to-system, and
system-to-system workflow, perhaps the greatest gains come
in the human element. "Organizations receiving the greatest
ROI from BPM tools are those that are focused on people-topeople tools such as in the coordination of work. That's where
the greatest efficiency gains are," says Michael Melenovsky,
director of research for BPM at Ciartner Inc., a researcb and
When initially consulting with clients on starting the process
of thinking about BPM tools, Melenovsky advises a review of
six critical success factors:
1. Alignment of strategy around key processes: senior-level
executives need to recognize the improvement of processes is critical. IT implementations need to be made aroimd
2. Culture and leadership: Does the enterprise recognize that
continuous improvement is of value to the organization
and employees? Provide employees with specific actions.
3. Skills: Wbat skills do people bave to define a process?
How do you go about running simulations as well as
measuring and analyzing processes? Organizations focused toward continuous improvement will be looking
toward a revision cycle of a process.
4. Governance structure: Wbat procedures are in place to
guide decisions around process?
5. Methodologies: What are tbe methods required to embrace a process during its lifecycle? Examples include
value-stream mapping, voice of tbe customer, six sigma,
"lean" methods, etc.
6. Technology: Only after an assessment of the above factors can tbe best solution be applied.
"One of the first questions we ask is if the business is interested in continuous improvement or if they're just looking
for some tools to do a project. That will influence whether
you need a BPM suite or point solutions," Melenovsky says.
Business activity monitoring (BAM) tools support activities
march/aprll 2007 27
The focus on continuous
improvement is an overriding
reason for adopting BPM solutions.
and set metrics while data is analyzed through business process analysis (BPA) tools. Analysis comes from BPA tools and
Melenovsky notes a number of point-solution providers offer
modeling tools, such as IDS Scheer and Profornia.
Enterprises use these BPM tools to change existing processes or increase process performance, such as claims processing. "You need to collect a metric on the performance of
the process," Melenovsky says. "After you've defined what,
specifically, to change, process modeling or mapping is used
to reach the desired state. There are all sorts of simulation
software for this. Then decide how you are going to optimize
The focus on continuous improvement is an overriding reason for adopting BPM solutions. That was one finding of a
survey by Business Process Trends magazine and Transfornin
tation-i-Innovation, a BPM consultancy, that polled about 300
companies across a diverse range of industries and sizes in
2005. Respondents reported overwhelmingly that improving
existing processes is a key objective of their current BPM initiative. The survey also found these leading reasons for taking
on BPM initiatives:
• redesigning a major business process;
• performing enterprise-wide process modeling;
• measuring organizational performance;
• using a BPM suite to obtain process automation; and
• delivering process performance data to senior executives.
The survey reported the leading business functions using BPM
include customer service, back-office operations, order entry
and billing, compliance management, and manufacturing and
The eye on improvement is prevalent, says Nathaniel Palmer, president of Transformation-*-In novation, as organizations
have more to manage including risk. "Workflow is certainly
more sophisticated today in looking to manage uncertainty
around organizations." He notes the evolution of two BPMspecific standards, BPMN (Business Process Modeling Notation) and XPDL (XML Process Definition Language), have
28 marcfi/april 2007
helped facilitate this, while assisting organizations to take advantage of SOA (service-oriented architecture).
"With tbc reality of SOA and standards-based integration,
the integration can be increasingly less of an issue. Establishing the connection points no longer requires the cost it once
did. Yet defining the process is the part that is costly," Palmer
says. His recommendation is that enterprises take advantage
of process models usable at a system level and readable at
a business level, like those built around standards such as
BPMN and XPDL.
Enterprises certainly have many options when it comes to
BPM. Recently, both ECM and middleware provider camps
have entered the picture. "Organizations will develop BPM
applications but they aren't necessarily going to a stand-alone
BPM vendor anymore," notes Bill Chambers, vice president of
consulting services at Doculabs, a technology-consulting firm
with a focus on ECM strategy.
Chambers outlines two trends within the maturing BPM space
that influence how the enterprise views and subsequently incorporates BPM tools:
• BPM functionality has been absorbed into the offerings by
big-name application development/middleware providers
like IBM and BEA as well as vendors who provide other
portions of IT infrastructure such as Tibco; and
• A number of ECM vendors have bought into or have
developed their own BPM environments. These include
EileNet and Documentum, among others.
Chambers says down the road very few pure BPM vendors
may survive outside of real specific application providers like
Pegasystems and Savvion. "BPM functionality is becoming
more absorbed into other application development solutions,
not a separate product." He's observed less of a focus hy many
organizations on pure BPM applications and more toward developing ECM strategies that incorporate BPM.
The push toward SOA seen in the IT environment during the
The Expanding BPM Macrocosm
last few ye^irs. Chambers says, will continue to influence how
BPM is used. While the business side of the enterprise dictates
BPM, the IT side of the enterprise is increasingly going toward
the SOA environment.
Silver adds, "BPM is just now starting to make concrete
connections to SOA. IT is working on these services with registries and other ways to connect them." He notes vendors like
IBM, BEA, Oracle, Tibco, and Web Methods are examples of
vendors offering BPM and SOA.
No matter the standards used and IT infrastructure, experts
suggest that in order to get the benefits of BPM, analysis, execution, and monitoring needs to be performed at peak efficiency. Moreover, as Melenovsky and otbers suggest, sometimes
BPM efforts are too focused on simply automating processes
or on individual projects,
Melenovsky compares the situation to a Catch 22. While
businesses are heavily investing in continuous improvement,
IT t)rganizations aren't designed around such a model. "By
and large, organizations are still focused on project work.
We've seen, though, small to medium-sized companies becoming more effective at adopting these BPM tools than Eortunc
500s." Obviously larger enterprises can't turn on a dime. Melenovsky says the agility of smaller enterprises is conducive to
the paradigm shift versus the daunting change in culture that's
required of larger organizations.
Kor enterprises that are at least on tbe path toward making
decisions around RPM, whether for suite technology or point
solutions, consultant Bruce Silver offers information. Eor a nocost overview report on the BPM suite as well as specific product
reports, see http://www.bpminstitute.org/bpmsreport.html. Hi
Marcia Jedd is president of MJ & Associates (www.marciajedd.
com), a marketing communications and research consultancy in
BPM is a relatively young industry that is only starting to come
of age, say analysts. In fact, Gartner didn't officially recognize
it as its own market until several years ago. Pure-play BPM
players emerged around 2002 out of the collaborative workflow
space, suggests Michael Melenovsky of Gartner.
As BPM matures, the market space is expanding. "Gartner
has identified more than 180 vendors worldwide that aspire
to BPM," Melenovsky says. However, Gartner seriously tracks
about eighteen of the leading competitors. The alignment of
processes and the stretch toward continuous improvement
isn't cheap. Melenovsky estimates that point solutions such as
modeling and BAM (business activity monitoring) tools can run
an enterprise up to $50,000 in licensing fees. "Pricing in these
products may be going down over time as the market continues
to mature and consolidate," he says.
Conversely, those enterprises requiring robust solutions toward full BPM suites might expect to shell out up to $200,000
to address a few areas of operation. "If you start to go enterprise-wide, depending on the size of the organization, these
implementations can run in the millions of dollars." Melenovsky
"As we look at the growth of the revenues of BPM suite product providers, the sizes of deals are getting larger and larger.
Customers are beyond the piiot stage, in many cases, moving
enterprise-wide at Fortune 1000 companies and in the government sector," Melenovsky says.
Training is another issue, though relatively contained, suggests Bill Chambers of Doculabs. except around some of the
more sophisticated modeling and simulation tools. "A lot of solutions, such as those by Lombardi, Savvion, and Pegasystems
have such sophisticated graphic design and modeling environments that a lot of training is required. Training processes
around these areas has to be much more dynamic."
All told, Gartner estimated the global BPM market at $930
million in 2006, clipping along at a more than 18 percent annual
growth rate. Gartner estimates the market will reach $2 billion
march/april 2007 29
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