Rashid N. Khan, the founder and CEO of Ultimus, wondered this week if
the BPM Industry is Stuck in No-Man's Land. He bases his analysis on market predictions from reputable analysts for the past 10 years:
Even if I take a conservative forecast and assume that the market was $1 billion in 1998 and growing at 15% per annum, it should be at least $4 billion today. But the most recent forecast continue to put it in the $2 billion range. So where does all the growth fizzle away?
He also notes that even though it is easy to come up with good ROI studies and for management to understand the benefits of BPM,
the penetration of BPM in organizations is still small and I would venture to say that less than 10% of processes are automated despite all the ROI and productivity proof points.
The best proof of this anemic state is according to him:
most pure-play BPM vendors are relatively small companies and none have been able to go public despite the claims of growth and the fact that many of them have raised tens of millions of dollars in venture capital.
He believes that this can be explained by the fact that BPM is not easy, especially for a company the size of pure-play BPM vendors:
- human beings work in extremely complex ways
- The “human interface” of BPM is complex and challenging
- IT environments in which BPM has to thrive are very complex, varied and in constant flux
- The “application interface” of BPM is complex and challenging
- Executive leaders prefer to deal with large platform vendors such as IBM, SAP, Microsoft and Oracle
- The “market interface” of BPM is also complex and challenging
Honestly I never agree with statements that "everything is complex". The limiting factor of traditionnal BPM suites is not that human, application and market interfaces are complex; the limiting factor is that they bring complex solutions. Bringing a simple enough solution to a complex set of problems, that's the real value.
Rashid is however optimistic for the future of BPM as he sees the current technological evolution enabling pure-play vendors to leverage Web 2.0 and SOA to more effectively compete with infrastructure players and altogether grow the BPM market.
Here though I fully agree. In addition to Web 2.0 and SOA, Cloud Computing, and more specifically, Platform-as-a-Service (PaaS) brings a new dimension to both IT and BPM, bringing an opportunity for a dramatic improvment in BPM adoption. It won't help all existing BPM vendors, but it does offer the tools to build new and more simple BPM offerings. It calls for the death of complexity.
BPM delivered on a PaaS model (a.k.a BPM-as-a-Service) changes significantly the ROI of BPM projects. As Rachid points out, BPM is complex and many BPM efforts lost steam when they were unable to generate enough ROI to cover the initial platform investment as they focused on automating simple processes with low level of integration first. PaaS, with its subscription model and an elastic infrastructure enables you to deploy your first process for a budget of about $10k to 50k, consultng included, depending on the level of complexity. In addition, BPM-as-a-Service allows you to tackle unchartered territories and support easily processes where business partners, suppliers and customers collaborate to create business value. There processes have been virtually impossible to address with traditional on-premise BPM platforms.
But that's not all, BPM-as-a-Service also plays well within your Cloud Computing strategy. Cloud Computing is a reality today. The growth rate of Amazon Web Services or SalesForce.com show that this is the superior business model. Large sections of IT's infrastructure and solutions will move to the Cloud. This is inevitable. As more IT solutions and data move to the cloud, IT will need a process-driven integration platform to help integrate SaaS solutions with traditional IT systems. And obviously you'd rather use a BPM plaform with a delivery and business model coherent with your Software-as-a-Service choices.
Finally BPM as a Service helps addressing the "Long Tail" of entreprise IT. These 50% of IT needs that are never taken into consideration by IT organizations. These projects that do not have a ROI (as if a 3 years ERP project had any ROI... but that's another story), but would make life easier. Good BPM services help you automate that myriad business activities, while avoiding them to be completly disconnected from your IT, which they are today. And yes, such BPM servcies do also tackle large, complex process and integration issues. Being complex is much easier than bringing simplicity ;-).
Like Rashid, we at RunMyProcess are very optimistic for the future of BPM.
