Looking beyond the BPM hype

Business process management (BPM) must be one of the most confusing terms the IT industry has managed to unleash on its long-suffering customers.

BPM is touted as the latest must-have, all-singing, all-dancing cure-all for organisations desperate to boost productivity and efficiency. But what it actually comprises is nigh-on opaque to the average IT director.

The situation isn't helped by the wealth of so-called BPM vendors merrily trying to put their own spin on the technology.

So what is BPM? And why are so many suppliers gagging for a piece of the action?

According to Ian Charlesworth, senior research analyst at Butler Group, BPM involves connecting all the elements and assets involved in any given business process, to ensure that execution is seamless and therefore more effective.

The technology itself works by abstracting control of the appropriate business process to a business process layer so that it can be remodelled and used as a means of integrating and orchestrating all the people, applications and system components needed to make it work effectively.

As a result, BPM products comprise four main elements, explains Eric Austvold, a research director at AMR Research.

The first is modelling to analyse and capture the business process in a repository. Next comes management to administer the means by which the process relates to the people and systems involved.

The third ingredient is an execution engine to execute the defined process flow. The final one is reporting. The aim here is to provide a feedback loop to enable a process of continual improvement to become the norm.

No one is quite sure where the term BPM originated, although Jim Campbell, a consultant at Partners for Change, believes that it grew out of disciplines such as business process re-engineering and technologies such as process automation, workflow and application integration.

"BPM isn't new, but is a culmination and evolution of existing best practices and technology that have now been repackaged," he suggests.

But that's not to say BPM doesn't have its benefits. To date, suppliers have mainly pushed the eye-catching claim that it allows customers to obtain return on investment (ROI) from remodelling the underlying processes of enterprise applications such as ERP. But Charlesworth sees it as more of a change management tool.

"Enterprise applications generally do an excellent job of automating 'vanilla' processes, so re-engineering them and adding another layer to make them more efficient doesn't stack up," he says.

"Where BPM does benefit organisations, though, is by improving process control and management and becoming a tool to help the business manage change."

Such change includes allowing organisations to integrate and consolidate processes following a merger or acquisition, and to streamline and co-ordinate the activities of different functional departments such as sales, marketing and engineering to ensure that new products can be brought to market quicker.

The goals here are generally to cut costs and boost customer service.

Another key area in which BPM is considered to be of increasing value is regulatory compliance, because it can radically improve auditability and traceability.

"It's much easier to undertake a full audit trail with BPM, so canny organisations are looking at it as an opportunity to offset the cost of compliance," says Charlesworth.

This means uptake has so far been highest in sectors where this is a particular issue, such as financial services.

But interest is also strong in manufacturing, where organisations are looking for new ways to solve their supply chain and order management problems, and in telecoms, where even a tiny increase in transaction volumes can have a significant impact on the bottom line.

As a result, Gartner expects the overall market, which includes licence, maintenance and services revenues, to grow by 10 per cent this year to $1.32bn (£730m), driven mainly by large FTSE 100 companies.

But such organisations are, in the main, still only in the early phases of adoption, focusing on small projects to tackle internal processes in one functional area or trouble spot rather than on large enterprise-wide initiatives that may even involve third parties such as partners, suppliers or customers.

This immaturity is reflected in the recent emergence of 200 or so vendors all claiming to be key players in an emerging market, says Charlesworth.

Despite their protestations, however, most have gaps in their product lines, which reflect their heritage. Traditional workflow suppliers, for example, are generally weak on the application integration side, while the opposite is true of integration companies.

As a result, many are still in the process of fleshing out their offerings via acquisition, and while this should not put customers off buying, Charlesworth urges caution at the evaluation stage to ensure that individual products match IT directors' own particular requirements.

Nevertheless, he believes the three most comprehensive BPM suites are from are IBM, webMethods and SeeBeyond, even though Gartner believes that the leaders in terms of market share are DST Systems, Pegasystems and FileNet.

But on the implementation side, Charlesworth warns of the potential for spiralling costs. Not only are software licences expensive, being roughly comparable in price to workflow applications, but the complexity of many BPM projects can result in the need for significant investment in time and resources.

"I'm quite cautious about BPM in general," says Charlesworth. "Just because the technology is available doesn't mean to say it's easy to do or provides a positive ROI. It can be expensive and this comes down to the level of service required to fit the solution."

He compares the situation to the hype that used to surround ERP, CRM and other alleged panaceas. "The vendors are really hyping the benefits," he observes.

"Like ERP, it's going to solve all of your business pain. This means you have to be diligent and careful how you invest."

This view is backed up by AMR's Austvold, who says the market is unlikely to hit the mainstream for several years.

Hurdles include user scepticism about large software projects, a lack of product interoperability standards, and the need for enterprises to adopt a process-oriented rather than a task-oriented or function-oriented approach to doing business.

"It's probably a decade-long transition to BPM, but we're only in the first three years so it's very early days," explains Charlesworth.

"However, I would still advise IT directors to look at the technology. It's a must-have if you don't want to lose profits to inefficient processes, and adoption is becoming a case of not if, but when."

Case study: DVLA
"We were very much a silo-based organisation, but introducing business process management technology has meant that different departments can now work more closely together, which has improved customer service," says Anita Evans, project assurance manager at the Driver and Vehicle Licensing Agency.

The DVLA maintains registers of more than 40 million UK drivers and 30 million vehicles, as well as collecting car tax.

It is an executive agency of the Department for Transport, handling 91 million forms and processing 50 million transactions each year.

While dealing with such forms is predominantly straightforward, there are always exceptions, known as 'casework', where information is incomplete or incorrect and needs to be tackled separately.

One of the DVLA's departments, the Drivers Medical Section (DMS), which handles about 300,000 medically related cases each year, had in the past used an ageing document management system to help it deal with the mountains of paper generated.

"The need to replace it provided us with an opportunity to cast our net wider and incorporate the three main business areas still on paper: Vehicles Customer Service, Driver Customer Service and our department," recalls Evans.

As a result, the organisation brought in EDS to design its Casework and Specialist Processes (Casp) system, which included BPM applications from Staffware, Anacomp's document imaging and storage system, and Vignette's Tower document management packages.

Also involved was Kodak, which developed a system to translate microfiche records into documents that are now held in a storage area network, and IBM and Fujitsu, which hosted the DVLA's core systems. This includes its Oracle databases that hold the case data.

"It was a huge partnership, and we'd never have coped without everyone doing their bit," says Evans. "The transition was huge and we didn't expect it to take as long as it did.

"The product development for Casp was fine, but the issue was getting the auxiliary technology around it and we had several projects going on at the same time, so managing interdependencies was difficult."

However, the BPM engine in Casp now orchestrates all casework processes across the three departments and allows call centre agents and case workers to access documents and case data in microseconds rather than the previous five to six minutes when staff "through experience guessed where the information was".

Each case, which involves multiple documents and tasks, is tracked. Any issues or missed steps in pre-determined processes are flagged for employee attention.

Not only has auditing and traceability improved, but DMS alone has cut its backlog of 100,000 cases to 60,000 in six months. And despite a 24 per cent increase in medical queries in five years, the department has also not had to employ more staff.