Mom's Unimprovable Cherry Pie ... and Why Everything Else Needs Work
My mom had a process for making pies that no software could have improved. I happened to be born on February 22nd, which is a birthday I share with George Washington. So on my birthday, I never got cake. I got cherry pie. (Get it?).
But I am not complaining. To the contrary, I love cherry pie. Mom's cherry pie, especially, which I miss terrifically. I suspect that the world will never again enjoy such perfection.
But aside from that annual cherry pie, every other process I've ever known needs improving. And judging by the remarks of the various business process management (BPM) vendors I've spoken with lately, the market is feeling the same way.
"We never hear anyone say, ‘Hey, I want some BPM software," says Laura Mooney, director of corporate and product marketing for Metastorm. "But they DO say, ‘I have this process problem, and from what I understand about BPM software, I think it can help me.' Then it's our job to explain to them how BPM is a better investment than buying a point solution, or a packaged application."
That's a degree closer toward market "recognition" than was true a year ago or so. Thanks—probably—to the trade press, the analyst community and the multitude of conferences and webinars, the concept of an overriding system that manages ALL (or nearly all) of a business' many functions and activities is becoming more familiar.
But it's a hard act to get. How, one might ask, can all business activity, no matter how vastly different on the surface, share enough commonality that a single software tool can manage all of it?
"Take new product introduction, for example," explains Mooney. "Manufacturers recognize that it's a lengthy process that touches a lot of different people and processes along the way. Vendors have created packaged applications that purport to manage the new product introduction process. But those solutions are very expensive...and they only have one application within the company. By applying BPM to the problem—facilitating the various processes, fostering collaboration among the parties, providing the necessary documentation, providing the analysis to improve future new product introduction—companies can solve their problem, AND use the same tools for other process problems in their business."
Because when you boil down to the fundamentals, an auto manufacturer and a life sciences company share more than you'd first imagine: they both use design diagrams they need to route for review and approval; they both have compliance issues that have to be addressed; they both assign teams to collaborate and add expertise to the design and manufacturing process. So at the underlying level, many needs are the same, not only across industries, but within companies across activities and departments. That's how "generic" BPM has emerged as an industry unto itself. BPM is flexible, and it adapts. Darwin got it right, by golly.
Enter the Template
Not so fast, others say. There are alternatives to the "horizontal" BPM solution, and there are shades of gray in between. "There are a lot of products that present a graphical development environment," reminds Tracy Shelby, systems officer for AWD sales and marketing at DST Technologies. The implication being that a skill- and resource-rich IT department could have a ball building custom BPM solution. And maybe that's what they're doing with their time. But the movement toward templates and vertical-market "pre-fab" BPM solutions seems to suggest otherwise.
"Those (developer's tools) are probably very strong tools for consultants. In the heyday of workflow, the Andersens and the Deloittes used tools like these to facilitate big consulting projects, with their three-to-one, five-to-one services to license-to-dollar ratios." Those kinds of tools are still with us. "Right, and they facilitate the process, but they are not the answer to solving the overall customer problem," says Shelby.
"We have a product called Healthcare Process Management. It's a play on words, but the important part is that our message is not ‘we've got a big rules engine, and a big BPM server.' The message is: we've developed a system that sits on top of your business and clinical information systems, and we have pre-built components for each of the areas that make up this thing called the revenue cycle for your hospital." In DST's case, talking the talk is entrée into a vertical market.
"There are some BPM vendors who are more technology-focused, and they provide the tech guys new tools to build applications," agrees Bob Puccinelli, DST's director of marketing. "Other BPM vendors are more business-focused—more of a layer that fits in with existing applications. The advantage for the business-orientation is that it provides the customer a method to determine what core competencies you have as a vendor," says Puccinelli.
But IT guys aren't thinking that way...yet. It may seem counter-intuitive—you'd think that IT would rather take on a pre-packaged product than a generic toolkit that will require a great deal of customization. But IT often would rather work with a single software provider that can work with them to solve multiple problems, than multiple solutions from multiple vendors.
"A packaged product requires you to conform with one way of doing (the process)," Puccinelli continues. "In a competitive environment, that stifles differentiation. You probably think your process is unique, and better, than your competition.
"Organizations are demanding faster implementation times PLUS greater agility in the applications they put in place. They don't want to spend $2 million and take a year or more to implement, and then not be able to change it or improve it."
With resources strained—particularly IT budgets—that kind of scenario doesn't cut it. "They want to spend a couple hundred thousand, get it going in 90 days and then have the option to improve and tweak it from now on," says Puccinelli.
But even such heavily verticalized solutions see the wisdom in selecting specialist partners—in DST's case, IDS Scheer for modeling, Fair Isaac for business rules, Business Objects for reporting and dashboard. Many of the companies that are successful in this space have all gone down this road. It's why Jim Sinur puts them in the Gartner "leader quadrant"—they have pulled together the best of breed.
To complicate matters further—as though they need to be—there are many "spot" tools that are related to BPM, but not quite the entire enchilada. For instance, there are business-rules vendors who call themselves BPM. Likewise, modeling tools are available that call themselves BPM, but don't quite deserve to rise to that level. Seeing through that muddy water is a challenge for business customers.
The IT Factor
"It's a tough choice," points out Dan Ryan, executive vice president for marketing and business development at Stellent. "When there's a line-of-business solution that deploys rapidly and solves a problem, maybe that's a great silo to have! On the other hand, there is an incentive to leverage common technologies. So there are two perspectives at work for the IT department.
"Horizontal BPM is like content management," he explains. "You usually go in solving a particular problem, and ultimately, after working on three or four applications, somebody in the IT organization notices, and says ‘this is great baseline technology—we want to use it to solve other business problems.' I can see that happening, but it's hard to imagine someone ‘buying BPM' without having that specific set of original goals to start from.
"For us, BPM is an implementation tool," Ryan says. "Once complete, the end users would never feel the results of it—they're not interacting with BPM, they're interacting with an in-basket of tasks."
Toni Eddleman, product marketing manager of Stellent, adds, "Departments talk with each other, and they can see the savings that someone else has gained and they want to do that too. But when it comes to spreading it throughout the organization, they will coordinate with IT in order to apply the techniques to other departments. "We have a sweet spot in accounts payable, and how to automate that," Eddleman continues. "We've seen, from customer to customer, an 80-20 rule exists, where 80% of the function is repeatable. So we have pre-built templates and best practices that allow us to go in from a great starting point, which results in faster implementations and less cost to the customer. Where we don't have that much domain expertise, we partner with a consulting firm."
"The truly successful BPM vendors make some attempt to bring either vertical market customization OR they bring some functional component that is critical to the customer's business activity, such as A/P, HR, etc.," says Ryan.
Market Movement
Mike Crosno, president of Global 360 (recently formerly eiStream) takes the time to provide an historical perspective, and to describe the trends in the customer profile of his company:
"Most of the market—more than 50% of our customers—has a workflow or imaging system installed that hasn't paid off in the way they expected it would. Or they haven't been able to optimize the process to the degree they'd like. That's the bulk of our current customers—they're on the inevitable downside of a ‘roller-coaster'-type adoption cycle.
"Then there's probably 25% to 30% who come to us with an idea to create a brand-new application—these are green-field applications that had never been previously considered. ‘Forget about the existing process,' they say. ‘I want a brand new way of working.'"
Crosno then describes the most recent trend: "The smallest number of customers—but I believe where the market is going—are starting at the CXO-level executive who says: ‘I don't want a lot of BPM products that don't work together and can't be optimized.' So companies are now hoping to develop BPM, and the analytics of process automation, as a services-oriented platform, enabling them to build composite, re-usable applications that are process-centric, and to take that repository of composite apps and re-use them."
This is a predictable turns of events, by the way—the ECM market is going through this same phase. Any enterprise of significant size has—practically by definition—eight or nine major divisions. Take Disney as a great example—it's got TV, it's got stores, it's got theme parks, it's got movie studios. If each of these divisions has separate process management or content systems, there's no opportunity for cross-leverage. The number of people working every day to model and simulate the many processes is dramatically higher, and there's no cost efficiencies spread across the organization.
"Look at ERP way back, and look at it today," points out Crosno. "Ten years ago, ERP was simply a financial application. But they did what CRM has also done, which is to find loose-hanging applications and roll them up under the ERP umbrella." That's the same movement happening in the BPM market, he argues. "In the long term, most companies will want to lower the overall number of applications of a common nature."
This is, by definition, an executive-level trend. "For years, CRM was sold to business users. But now, the incremental spending on CRM comes from the CIO or other CXO- level person," says Crosno. "That's because the individual business manager only cares about his or her departmental applications; the CXO cares about the efficiencies that can be gained from reusable, service-oriented applications that cross-leverage across the entire enterprise."
And the transition to enterprise-wide BPM will not emerge from the current workflow technologies in place, believes Crosno. "There is not an easy transition from a workflow technology to a full-blown BPM suite success. If there was, the workflow vendors would dominate this industry and the rest of us could go home.
"Workflow is rigid, it deals with rules and the inherent logic of taking a task and moving it from one person to another. That's the easy part. The hard part is deriving a process from a goal-management perspective. There are three parts required for a BPM vendor to successfully survive in this business: One, they must approach it from a business-goal perspective, not a ‘routing/distribution' perspective; two, optimizing and delivering improved performance comes from modeling and simulation, not a rigid process model. And lastly, they need the ability to build templates that contain business rules, but are separate from the workflow."
Big Picture View
This growth path—from single-point solutions to an overall goal-management perspective—is a common theme among the BPM muckety mucks.
Michael McLaughlin is manager of consulting services and training for Exact Software. "We come in at a specific business area, such as CRM or call center, and then it spreads in a virus-like way across the entire organization," McLaughlin says. "We teach people a version of CRM, but the customers begin to see many touch-points within the organization. For example, the CRM group has a connection with the credit department. After a while, the credit department begins to see how THEY could use similar tools..."
Paul Kramer is product manager for Exact's eSynergy product line, and he agrees: "Businesses first take advantage of CRM to link accounts with customers. Then they begin to see the many processes that occur during the full experience with that customer. By gluing the two pieces together, you have the ability to define processes and view them from a broader perspective," he says.
"Here's an example: We have a customer whose problem was that one of their clients might have been talked to by multiple departments in the same day—accounting, customer support and so forth—and they had no way of tracking that. So linking CRM with BPM allows you to find all those common reference points."
"The key, we think," says McLaughlin, "is to have all these reference points captured into a single database. Instead of a best-of-breed idea, where BPM is outside of the other functions, we think it's important to provide the linkages through the common database."
This notion of cross-connecting departments is nothing new, of course, if you've been reading any of these white papers. But to approach it from a services-oriented approach—where the services equal business processes—is gaining traction. Kevin Spurway, vice president of marketing for Appian Software, sees it this way: "In the last year or so we have seen interest coming out of the IT department for BPM tools in general. Why? Because they've implemented their enterprise portals, they got a centralized place to link information. Now they need to connect it all in a more orchestrated way. As IT begins to take their applications into an SOA, and begin implementing Web services, BPM is becoming more recognized as the layer that connects business activities across the value chain, across different departments and is the link between people and data sources.
"We still see it from both sides of the fence," continues Spurway. "Are the business line owners in the drivers' seat, in terms of setting up their systems? Or are there strong controls from the IT organization that demand a more enterprise-oriented approach? It depends on the company."
Spurway contends, like many of the other vendors, that there ARE solutions that can be cross-leveraged. Procurement is an example. "There are specialists who sell ‘procurement' solutions, but BPM vendors can compete because of the flexibility, and because they can offer collaborative and analytical tools that the more packaged application vendors don't provide," he says. So BPM vendors can offer the process-oriented applications that other vendors specialize in, but can also add the secret sauce of flexibility and added value.
More and more, the concept of analytics and monitoring creeps into the BPM conversation. "There are a couple key trends that separate you on the quadrant," Spurway says, referring to the ubiquitous Gartner rating system. "One is the analytics and measurement piece—the integration of business intelligence and business activity monitoring and process management. The other is the diversification of BPM into a broader suite approach, where you bring together knowledge management, collaboration and identity group management and process management into one unified framework." This, Spurway and the others contend, is where the men part company with the boys.
"When you look at the concept of ‘Web-servicizing' an application or a database, the value in doing that becomes most apparent when it's connected to a business process. To gain the most value," Spurway says, "something has to happen beyond simply making an app accessible through Web services—you have to take advantage of the fact that now this application or information is open for business across the Web." Otherwise, why do it? "Web services allow companies to unlock resources that had previously only been available to a few select people."
Making these resources available outside the silos puts BPM in a new light for me. As long as we're talking about departmental processes, and the workflows associated with them, the discussion remains at the line-of-business level. But now, with Web services erasing the boundaries between functional operations within the company, BPM becomes an executive-level concern—a way of looking at the business from an overall, big-picture perspective.
That changes the ball game for BPM. As long as corporate overseers feel the need to improve their business processes—which will be, like, forever—BPM will be the tool of choice to improve those processes. And they can all stand improving.
All of them except one, of course. Thanks, Mom.
Andy Moore is a 25-year publishing professional, editor and writer who concentrates on business process improvement through document and content management. As a publication editor, Moore most recently was editor-in-chief and co-publisher of KMWorld Magazine. He is now publisher of KMWorld Magazine and its related online publications. As Editorial Director for the Specialty Publishing Group, Moore acts as chair for the "KMWorld Best Practices White Papers" and the "EContent Leadership" series, overseeing editorial content, conducting market research and writing the opening essays for each of the white papers in the series.
Moore has been fortunate enough to cover emerging areas of applied technology for much of his career, ranging from telecom and networking through to information management. In this role, he has been pleased to witness first-hand the decade's most significant business and organizational revolution: the drive to leverage organizational knowledge assets (documents, records, information and object repositories) to improve performance and improve lives. Moore is based in Camden, Maine, and can be reached at andy_moore@verizon.net.