BPM in Action

Lombardi Software of Austin TX briefed an analyst group on July 29 about the six months ended June 30, 2008. This was not an IT-Investment-Research-type briefing because Lombardi is still privately held. (But I am underlining privately because if the Metastorm IPO is successful it should open the equity-market floodgates for standalone BPM software suppliers.)

Although it provided no hard numbers, the company said it had experienced 50 percent overall revenue growth compared to the same period in 2007, which is impressive in the middle of what fellow Texan and former U.S. Senator Phil Gramm has called a “mental recession” here in the U.S. One of the reasons for the apparent disconnect is because Lombardi is beginning to do well outside the U.S., citing representative customer wins from Ayudhya Allianz C.P. (Thailand), Allianz Hungaria Biztosito Zrt., G&D Integrated, Jaguar Land Rover, Maritz Research, Merchant Investors Assurance Company Ltd., OAD Groep BV, Savvis, Singapore Refining Company Private Limited, TeliaSonera, Wirtualna Polska SA. There were also wins at Yale University and the Massachusetts Department of Revenue, two places that many Americans think of as outside the country. During 1H08, the company shipped two major product upgrades which I wrote about here and here.

Given that there was no real news and no numbers to dive into I was interested in what the Lombardi executives thought about the Metastorm strategy. As I discussed on my own site, Metastorm is looking at a market that combines EAM, business process analysis and BPM. Lombardi agrees that it is seeing those functions converging? They said “To the extent that white collar workers are doing all of those things, they need to address it.” I don’t see the EAM connection but I’ve discussed why elsewhere.

Another comment I dug into was the President Phil Gilbert’s prediction that major changes were coming in BPM. “You won’t recognize it in 10 years” I think was the quote. I asked for some more detail offline and Lombardi responded by email:

“BPM is the scalable program by which a company develops and maintains a capability for change. By "capability for change" I mean: having a corporate culture that will actively embrace change, without fear, and work to make that change good. Today, most cultures actively reject change, until forced by market conditions into it. And while companies are finding that the technologies of a BPMS ((roughly characterized as model-based design, business rules, business intelligence, business activity monitoring, and workflow) help, they don't solve the cultural problem of people embracing change. The maturity of today's BPMSs… may reduce the development time of a process application from, say, 90 days to 89 days. But it still takes months for a business case to get approved to charter the project. It still takes weeks to roll-out the new application. It still takes a year to get budget. “

Unless I miss my guess, that’s a great statement of the problem you face in implementing BPM in your company. In fact, please comment or send us an email if you are not seeing that kind of resistance because we would like to do a case study for an upcoming feature article. If—as is likely—you are seeing the type of resistance that Phil mentions, we will be happy to do a case study next year.

By the way, Lombardi says:

“The next major release of Lombardi Teamworks will make a big step forward in re-thinking change management around BPMS-developed process applications.”

They're not going to sit back and wait the decade out.

Posted by dennisb in BPM  |  Permalink  | Comments (0)  | TrackBacks (0)

Well, well, well. That would be one “well” each for Hewlett-Packard, Intel, and Yahoo!, all three of which announced today plans to build a test bed for cloud computing that will span six data centers in three countries.

The goals are simple, yet profoundly broad – to provide a real-life test bed for all things cloud-related, including hardware, software, and data center management, and to encourage collaboration among academia, government, and industry.

Better yet, HP, Intel, and Yahoo! say that they plan to provide application programming interfaces (APIs) that expose the guts of all levels of “their” cloud, from low-level physical infrastructure to high-level software and services. Published reports indicate that this is a prime differentiator of this effort from one announced previously by Google and IBM. THAT initiative apparently only supports openness to developers and tire-kickers at the application/service level.

HP, Intel, and Yahoo! plan to have all six data centers operating in concert before year’s end. I, for one, can barely wait. If The Big Mash-Up is in fact coming – and it is – the interested segments of the world at large will need a readily available, open, and flexible environment within which to build and test solutions. Solutions ranging from variations on traditional applications to cloud-based fill-in-the-blank(s)-as-a-service. And, ultimately, those building and testing such solutions will also need a robust environment within which to deploy the successful ones. And I doubt that many will care whether that turns out to be the HP-Intel-Yahoo! cloud, the Google-IBM cloud, the Sun Microsystems cloud/grid, or something else. Choice and competition are good.

Software as a service (SaaS) and its evolving descendents are critical to the success and broad adoption of The Big Mash-Up, which promises/threatens to integrate almost everything that matters to business users and business and IT decision-makers. Including and especially elements related to business process management and optimization. Some variation of cloud computing seems to be emerging as the “go-to” platform for software-and-everything-else-business-related-as-a-service, joining and perhaps supplanting current service-oriented architecture (SOA) efforts. This latest cloud, perhaps paradoxically, brightens the whole picture for cloud computing, SaaS, and The Big Mash-Up. I can barely wait for the first slew of solutions we can explore – and I don’t expect to have to wait for very long.

Shameless Self-Promotion, Again/Still: I’m fielding another Aberdeen Group survey on information architecture agility. If you have investments and/or interests in Information Lifecycle Management (ILM), Master Data Management (MDM), or reducing “time to information” – the time it takes to turn raw data into information business applications and users can use – please go to http://www.aberdeen.com/survey/agil-ebizq/ and take the brief survey. You’ll get a free copy of the resulting report when it’s published, AND a free copy of my recent Aberdeen report on Radio Frequency Identification (RFID) and IT infrastructures immediately after you complete the survey. (Yes, you SHOULD care about RFID!) That’s nearly $800 of free research, and my undying thanks, all for taking a survey. Such a deal – take the survey, and tell your friends!

Posted by mdortch in BPM • Business Knowledge Management • Current Events • IT Infrastructure Management • Information Lifecycle Management • Process Visibility • SOA • Software as a Service • The Big Mash-Up  |  Permalink  | Comments (0)  | TrackBacks (0)

On July 21 when Appian went for venture funding for the first time, I said that it was rare that my IT Investment Research (see link to the right) work intersected with my business process management (BPM) blogging. But here I am a week later with a similar cross-over: IBM’s (IBM) July 28, 2008 announcement that it was acquiring the French business-rules-engine/optimization/visualization software supplier Ilog. At least this week, let me add some user advice—the primary purpose of this blog—to the investment analysis.

There are three kinds of Ilog business process management (BPM) software users and one of the three has to be concerned about the deal. First off, users that have long used both IBM and Ilog products as their primary suppliers--and there are many of them--of this sort of software should be all set, depending on how IBM’s integration of Ilog products into WebSphere and Tivoli take. It will be years not months so there is no immediate issue. Secondly, BPM users that like to “roll their own” for BPM are all set whether or not you consider both IBM and Ilog primary suppliers. You are a small group and since “rolling your own” is your whole philosophy, there is nothing IBM can do to change Ilog that will change your strategy.

Third, that leaves you whose primary supplier is Adobe (ADBE), Microsoft (MSFT), Oracle (ORCL), SAP (SAP), and others whose primary supplier is not IBM. You have some decisions to make. According to Ilog’s 20-F

“In fiscal year 2007, our largest customer was SAP A.G., an ISV, provided 3% of our revenues, and our next nine largest customers, of which three were ISVs, accounted for a further 11% of our revenues.”

[Note: in the conference call, Ilog said IBM became the leading partner in Ilog's fiscal 2008, which ended June 30, although "partner" was defined differently than the SAP relationship in the fiscal 2007 20-F referenced above.]

Those unnamed ISVs are probably your primary supplier. Your challenge: Do you stick with a BPM engine maker that is not in tune with your primary BPM or middleware supplier?

In addition, although less of a direct conflict, Ilog is a key partner with EMC/Documentum, Fujitsu, HandySoft, and Vitria. In fact, according to its 20-F

“As of June 30, 2007, we (Ilog) have entered into agreements with 547 ISV partners, of which 275 generated approximately 20% of our revenues in fiscal year 2007.”

By way of analogy, Ilog is basically an important independent piston maker that has been acquired by Ford.

This should be good news for other still independent rules-engine suppliers such as Corticon and Haley or even some of the work underway at Red Hat (RHAT)/JBoss to develop a full-featured open source alternative in the rules engine space.

Ilog also had important partnerships with Accenture (ACN), BearingPoint (BE), CapGemini, Infosys, and Wipro that might be affected by a new close relationship with IBM Global Services (or whatever they are called this year). As with many IBM tactics, this takeover might have as much to do with the fact that Ilog was ramping up its professional services staff as with the Ilog product lineup. IBM is really a services company as opposed to a technology company—despite the functionality discussion at the announcement. The Ilog products were probably not that important to the business opportunity from IBM top management perspective. It was probably more important that Ilog was transitioning to a business model with an emphasis more on services than technology just as IBM has already done.

(As for the half of the Ilog user base, as estimated by 2007 and past-year revenue flow, that is not using Ilog for BPM, that’s another issue for another blogger who writes regularly on another subject. Although Ilog highlights its BPM capabilities and most of the discussion at the conference call was BPM related, Ilog derived almost half of its revenue in 2007 from non-BPM CPLEX/LogicTools optimization software and a visualization product line. IBM said it was also interested in the possibilities of using that other technology in new ways and in fact already uses some of it as a customer.)

Posted by dennisb in BPM  |  Permalink  | Comments (3)  | TrackBacks (0)

Appian, one of the few remaining "pure-play" BPM vendors, just announced its first-ever venture investment – $10 million from Novak Biddle Venture Partners. I participated in a very interesting conversation among several other industry analysts, Matthew Calkins, Appian’s President and CEO, and Samir Gulati, the company’s VP of Marketing.

target="_blank"

As Dennis Byron rightly points out in his recent entry here on Appian, the company plans to step up its efforts regarding the delivery of BPM as a service. As the Appian executives confirmed on the call, Software as a Service (SaaS) technologies will help it to expand the reach of its BPM solutions, in ways that should turn out to be easier and less costly for Appian, its partners and customers than traditional software delivery and support methods alone. (Mr. Calkins added that the company has interesting plans to offer on-demand, self-paced and “pay-by-the-drink” support options to complement its SaaS offerings. This will help to avoid forcing users to buy professional services that can wipe out any SaaS-generated cost savings.)

Beyond SaaS, what I took away from the many interesting things Messrs. Calkins and Gulati said shake out roughly like this.

1. Appian has done a great job of growing organically, but perhaps has not really been able to mount channel-building, marketing, or partnering efforts at truly “enterprise-class” levels. The company is now stepping up efforts in all of these arenas.

2. There aren’t going to be that many top-tier, pure-play BPM vendors, and Appian intends to be one of them.

Frankly, I think the investment is great news, for Appian and for the BPM market in general. By my lights, BPM is one of those areas about which the strongest competitor for any vendor is often inaction aided and abetted by ignorance and/or skepticism. The more successful BPM vendors can tell credibly stories about how their customers and partners are succeeding, the safer – and bigger – the market can get. Because such stories are often the kick that gets prospective users and partners “off the fence” and “into the game.”

And with BPM, as with other elements of “The Big Mash-Up,” you can’t win if you don’t play.

Shameless Self-Promotion Department: I’m fielding another Aberdeen Group survey on information architecture agility. If you have investments and/or interests in Information Lifecycle Management (ILM), Master Data Management (MDM), or reducing “time to information” – the time it takes to turn raw data into information business applications and users can use – please go to http://www.aberdeen.com/survey/agil-ebizq/ and take the brief survey. You’ll get a free copy of the resulting report when it’s published, AND a free copy of my recent Aberdeen report on Radio Frequency Identification (RFID) and IT infrastructures immediately after you complete the survey. That’s nearly $800 of free research, and my undying thanks, all for taking a survey. Can’t beat it with a stick!

Posted by mdortch in BPM • Business Knowledge Management • Current Events • IT Infrastructure Management • Information Lifecycle Management • Software as a Service • The Big Mash-Up  |  Permalink  | Comments (0)  | TrackBacks (0)

On July 23, for my investment research work, I analyzed the Metastorm’s S-1. I said I thought the company was incorrectly betting that enterprise architecture management (EAM), business process analysis (BPA) and business process management (BPM) would coalesce into a market. I didn’t spend a lot of time defending my opinion because I also said it didn’t matter what I thought because:

“Metastorm is trying to redefine the already redefined category BPM… Such a redefinition is a tough challenge for a small player in a market and the challenge is compounded by the fact that all the major software-market players offer products in all these categories; even if Metastorm were successful in broadening the definition, its competitors are the same; there is no marketing advantage…”

Later I saw an article in a new technical trends journal that crystallized my thinking about why I disagreed with the Metastorm premise.

Metastorm is depending on the combination of process-related functionality into a product that would be used by developers, architects, business analysts, and even end users such as budget analysts and production planners, an unlikely combination in my opinion. Combining functions that all types of end users need is a more likely scenario.

The article that caught my eye is in the newly re-launched PwC Technology Forecast. It predicts that a suite of software will emerge that combines business intelligence (BI), rules engines and BPM. That is the likely combination that will emerge in my opinion and it reminded me that in 2004 at IDC, Dan Vesset and I called it “intelligent process automation” (he being the BI guy and I being the business rules/BPM guy). The term apparently never caught on. I found about 1800 hits on Google, small potatoes when it comes to buzzwords but the concept is emerging pretty much as we predicted as the next wave in BPM.

In 2004, we said it wasn’t all there yet because on the BI side there was a lack of event-based analytics and dynamic rules management, a lack of “self-learning” by the software because it did not track decisions and outcomes, and a lack of a process context. On the BPM side we saw the mirror image: a lack of data context (that is, data driving the process flow because BPM systems are traditionally and technically human-centric and exception based) and a lack of tight, hardened multi-enterprise process flows. BPM systems were not then taking advantage of all available underlying middleware technologies and were primarily only utilizing almost-10-year-old web server software capabilities, not much more powerful in many dimensions than the well-known Apache HTTP server.

This meant little to no tight connection to the canonical business flows, which are precursors of the application composites that are buried in every 'ERP system' or equivalent (what Michael Dortch has been calling the “Big Mashup”). Four years later, according to PwC:

“… with heroic effort, these applications can be stitched together to guide management and facilitate process enhancement.”

To understand the implications of some of these issues both in terms of the shortcomings of BPM and BI individually and what a full IPA solution might have, consider giving Dan a call at IDC.

Posted by dennisb in BPM  |  Permalink  | Comments (0)  | TrackBacks (0)

In March, when Appian announced its business process management (BPM) software contract with Enterprise Rent-a-Car, I noted that a lot of Appian’s technology such as Appian’s Form and Rules Designers and other real-user-facing components all work via a straight Web interface (no need for Flash, plug-ins, etc.). That helps support the company’s ability to deliver its Software as a Service (SaaS) offering called Appian Anywhere via almost any client. Given my day job with IT Investment Research (see link to right) I should have added that another big ingredient for any company going the SaaS route is money. For a bootstrap startup such as Appian that is not a trivial issue so it is not surprising that Appian’s founders announced venture funding on July 21.

Samir Gulati, Appian’s Vice President of Marketing and Matthew Calkins, its President and CEO, explained how they will use the $10 million investment by Novak Biddle to build up the SaaS infrastructure, market it and classic Appian Enterprise through a growing global and industry-specific partner ecosystem, and possibly add technology partners in the areas of business process analysis and business intelligence (BI). Started 10 years ago by guys from BI supplier Microstrategy, Appian has built on a Java base following the Unified Modeling Language (UML) and the XML Process Definition Language (xPDL). Appian comes with Red Hat JBoss out of the box but of course works with WebSphere and WebLogic as well.

But the good news is that users don’t have to worry about all that technology stuff. More important are the ease of use of Appian BPM implementation templates. Examples are available for procurement in federal government, for wealth management with rules for credit scoring, a program with Instill to build a quality management solution for the food/service industry, and a possible IT Help Desk template deriving from the Enterprise Rent a Car contract. One of the big uses of the investment will be to broaden and deepen such industry-specific and functionality-specific capabilities through partners. North America oriented today, Appian wants to expand outward in Europe from a beachhead in the U.K. and also add partners in Asia/Pacific.

How much of that growth is SaaS in the long term is an open question both for Appian and for the BPM market in general. I think the software market is going (back) to delvery as a service but that is more true for applications such as CRM than it is for BPM. The latter is true especially for those users that think of BPM as middleware. Calkins says he is prepared for both models of delivery but thinks there is an opportunity for a daily double where the two groups intersect: users that get their applications SaaS will have less of an issue using middleware delivered in that manner. Gulati says he expects to see examples of that both among small and medium size business as well as individual departments in larger companies and organizations.

Posted by dennisb in BPM  |  Permalink  | Comments (0)  | TrackBacks (0)

In case you needed some one other than your boss to tell you so, your budget is being cut. So says a recently released IT Spending research report from Computer Economics. There is a summary available on their web site and a longer version is available for sale. More interesting, according to the IT managers surveyed:

“Furthermore, the 4.0% planned increase in IT budgets in 2008 (Author’s note: vs. over 5% in 2007 depending on which research firm’s data is used) may prove to be optimistic. According to our survey, 25% of IT executives do not expect to spend all of the money allocated to them in their IT budgets…….”

Worse yet, capital budgets for information technology are flat. As expected the rates vary by industry, with manufacturers seeing almost no growth and energy/utility companies growing their budgets up to 8-9% (for the same reason thiefs rob banks). This is a U.S./Canada survey with an n of 200, fairly small for the industry splits to be too projectable.

So what business processes will be automated with these smaller spending levels? The company says that

“The hottest priorities for IT organizations… are… to improve service levels (#1) and better manage risks by improving disaster recovery capabilities (#2) and increasing IT security (#3), while at the same time reducing the cost of ongoing IT maintenance and support (#4). Around half of respondents across all sectors indicated that these priorities are increasing in importance this year.”

That makes it sound like a good year for the other half of CRM, the customer service and retention end of the CRM process set that rarely gets mentioned because all the emphasis is on salesforce automation and marketing.

CRM is a particularly important solution area for business process management (BPM) because it is one of the functions least integrated into ERP suites. That means BPM software can be used to tie the two together whether or not the CRM is another software package like ERP or a home-grown Web 2.0 capability. Both Jan Baan and >many users like yourselves talked about the importance of the CRM solutions area in our recent articles available here on ebizQ.

Posted by dennisb in BPM  |  Permalink  | Comments (0)  | TrackBacks (0)

When I started researching the ERP market in 1993 for Datapro, I quickly found there were over 100 ERP software providers even though most analysts only counted Oracle, J.D. Edwards, SAP and a dozen or so guys that are now part of Infor. (Some analysts even counted Hyperion’s accounting software as ERP, a credit to one of the best PR people I ever met, Judith Rothrock. She was able to convince some pretty savvy people that little Hyperion deserved to be mentioned in the same breath with the big boys. A few years later she pulled off the same play while quarterbacking Lawson’s PR.)

The difference between their list and mine was that I counted software supporting all industries rather than simply that which supported manufacturing. After all, what was HBO & Company’s (now McKesson) healthcare delivery software but ERP for healthcare? What was Hogan’s software but ERP for banks?

The logical extension of that process: what was the original SAP R/2 but a pharmaceuticals-specific ERP package? A business process management (BPM) trend I’ve started to watch here at ebizQ is the growth of industry-specific BPM suites. If what I found in the ERP market years ago holds true for BPM, it will turn out that dozens of these products already exist but are simply called something else.

For example:
• Over at it-director.com, Bloor’s Simon Holloway points out that Apriso’s FlexNet manufacturing execution system is really manufacturing-specific BPM software.
• Fort Washington PA-based Feith recently announced that it follows the U. S Department of Defense (DoD) 5015.2 standard. I have no idea what that means but based on the press release it looks like Feith’s lead product is a government-specific BPM product (even DoD-specific?)
• FTS, an Israel-based provider of Billing, CRM and Business Control solutions specializes in communication and content service providers; FTS’ BPM engine is actually the Oracle/BEA AquaLogic product
• Kaulkin Information Systems of Rockville MD creates workflow, document, and business process management technologies for its financial-services clients

Where are the equivalent BPM products for healthcare, retail, education and so forth? I suspect the list goes on and on just as it did for ERP and ebizQ would like to hear from you if you have such an industry-specific BPM solution. Particularly if you support the financial-services industry, see the information about our upcoming article here and participate in our survey.

Posted by dennisb in BPM  |  Permalink  | Comments (1)  | TrackBacks (0)

A recent article on CRM Today about BPM in banking reminds me that I have to get going on the next in a series of BPM-related research articles for ebizQ. The article talks about a Tower Group report that says:

"Financial services institutions will soon be forced to redefine the “classic” role of the bank teller, thanks to the decreasing number of teller transactions per year, advances in bank teller automation technology, and the rapid expansion of online and contact center channels."

That finding gets me asking the question, what better way to do such things in all areas of financial services than BPM software. If the day of the integrated application suite is truly done, then a lot of BPM software marketing organizations must be thinking the same way.

This month we are looking for BPM software and projects specific to financial services. I think of it as middleware but you might think of it as an application project. Let me know what you think either way and let me know why it fits one category or another. The survey instrument can be downloaded here.
Download file

The article is tentatively scheduled for release in August 2008. It will be similar to recent ebizQ articles on BPM as the new ERP software and similar product/category overviews. Your company’s product(s) may be mentioned based on my secondary research but if you would like to formally participate, download and return the attached 1-page survey form by Monday July 21, 2008 to dennis@ebizq.net.

Posted by dennisb in BPM  |  Permalink  | Comments (0)  | TrackBacks (0)

Like the week in December leading up to the Gregorian New Year (or do I have the wrong pope; is it Julian?), the week of July 4th is a slow news week. Although it is just an American holiday, IT companies believe that because the U.S. accounts for about 40% of all IT spending, it makes no sense to churn the worldwide waters with information while half the market is at the beach.

So this week provides me an opportunity for trolling the web with a google on "BPM" (I am always at the beach here on Cape Cod). I found an interesting blog and business process management (BPM)-related blog postings by a Microsoft "Enterprise Architect," Avinash Nicklas Chan Kumar Malik. His bio is here. The particular post that caught my eye is here (but there are a lot of other interesting BPM postings in his archives).

A Microsoft Enterprise Architect is a high-level professional developer and the point of his article, I think, is that BPM is not going to put programmers out of business. Despite the analysis of many, including me, that the goal of enterprises is to have BPM software working so well that non-IT folks can string together their own processes without getting the IT department involved, we aren't there yet. Avinash doesn't think we ever will be.

He may be right in terms of his criticism of BPM notation languages such as BPEL and BPMN (in fact, I never heard anyone promise that they would be used by non-IT). But if so, another trend (what you newbies call SaaS, or appliances, or some confluence of IT and the utility industry) will eventually reduce the role of the software developer as we know it. The demise of the IT developer in the enterprise is a matter of philosophy, economics and demographics. In reverse order, there are fewer and fewer well trained developers, they cost too much and we have to stop re-inventing the wheel.

By the way, Avinash, that is not to say that the need for developers won't grow and grow at Microsoft (and Oracle, SAP, IBM, Verizon, Google, ConEd, Disney/ABC, and so forth).

Posted by dennisb in BPM  |  Permalink  | Comments (1)  | TrackBacks (0)