BPM and measuring performance

A week ago today, I was in a tutorial by Roger Burlton of the Process Renewal Group on Enterprise Business Architecture: Strategy, Process and Capabilty Alignment while at the BPMG conference in London. He made a great analogy regarding performance measures: knowing the final score doesn’t tell you if it was a good game. (Although after once watching the Blue Jays lose 22-2, I posit that you could have told that it was a crappy game by the score alone.) Roger was one of many people at the conference who spoke about BPM in the context of measuring business goals. To quote Terry Schurter, who I heard speak the following day at his session BPMS – Selection by Business Value, “goals that can’t be measured aren’t goals”.

All this shows that BPM is finally creeping out of departments and into the mainstream of the enterprise. I read a post about a CEO’s view of BPM as discussed at a recent CEO roundtable today on the Milestone Group’s Thoughts On The Tech Industry blog that really nailed it:

BPM, or Business Process Management is the fasting growing segment in the BI / Data Management market sector. Growing out of departmental process management initiatives, the key driver now is to integrate across the enterprise, and to provide scorecards, reports, and other “C Level” deliverables with more confidence, so that predictive modeling and optimization initiatives are really based on the most complete and highest quality set of data available in the enterprise.

The CEOs consider BPM as a feed for enterprise BI/performance management, which is completely accurate — after all, why else would you be doing BPM if not to improve performance, and why would you be doing anything to improve performance if you weren’t also including it in your enterprise performance measures?

A nod to BPM and EA

When I started this blog a couple of months ago, I didn’t give a lot of thought to naming it, and decided just to be descriptive: hence “Sandy’s Biz Blog”. Can you tell that I’m an engineer and not a marketer?

My inner marketing voice spoke up this week — part of the overactive synapse response to the stimulating conference environment — and I had an overwhelming urge to rebrand. Since I’ve been spending a lot of time thinking about how BPM intertwines with EA, I’m giving a nod to Zachman with the new name, Column 2. (For those of you who aren’t EA aficionados, column 2 in the Zachman framework is where the process models live; although BPM is bigger than just column 2, I thought that it was a cool name.)

If you subscribe to this site, you can change to the new FeedBurner feed location here, although I’ll keep the old one active too.

BPM tools and methodologies

The Gartner webinar that I dropped in on yesterday had some interesting points about modelling and methodologies that started me thinking.

First, on methodologies: it’s absolutely essential to have some best practices to lend structure to your BPM project. Don’t do this alone, get the help of someone like me (okay, it doesn’t have to be me) who has actually implemented BPM projects before. Whenever you change a business process, there’s a whole lot more than just technology going on, and you don’t want to get caught in the classic IT trap of believing that the business users will be just as excited about the new technology as you are (remember, they didn’t get to play with the Java code).

There were comments in yesterday’s webinar about how the soft benefits are becoming more significant, including internal factors such as real-time business agility and a process-focussed culture. However, you can’t expect your organization to change because of the introduction of BPM technology; instead, your organization needs to make cultural changes driven by business factors and enabled by the technology.

On modelling tools, I made the statement last month that most people are using Visio to model their business processes before they are implemented in a BPM system, which is true. However, just because it’s true doesn’t mean that it’s the best way to do this. If you use a standard modelling notation such as BPMN or UML activity diagrams, you’ll do fine up to a point with Visio, but somewhere along the way to your “to be” process, you’re going to need a more serious tool for process simulation and the like. If you check out the BPtrends report on modelling tools that I reviewed last week, you’ll see a lot more tools with a lot more power than Visio for your process modelling and analysis. You’re not going to put these on everyone’s desktop, but they are needed for a few analysts who will be doing the in-depth process design.

BPM Momentum

I attended the The BPM Momentum: What’s Driving it? webinar today (not “what’s driving IT” as the host ebizQ erroneously labelled it, which has a much different meaning), featuring Jim Sinur of Gartner. Definitely worth catching the replay for Mr. Sinur’s comments on success factors for BPM projects and for his view of the market convergence.

He included Gartner’s Application Integration Hype cycle chart, showing how BPM technologies fit: apparently, BPM itself is sliding into the Trough of Disillusionment, whereas BPM Suites are still climbing towards the Peak of Inflated Expectations. (The hype cycle terminology always reminds me of the morality fable Pilgrim’s Progress with its Slough of Despond, but I digress.) He only put a 10% probability on the catastrophic scenario, which makes me feel a whole lot better.

He also had some good numbers on customers and their BPM projects:

  • 85% of BPM customers are now going after their human-facing processes (presumably, the automated system-to-system ones are already in place).
  • BPM projects are yielding an average IRR of 20% (although Gartner uses a more conservative figure of 15%), but larger projects can produce returns of well over 100%.
  • “Soft” benefits such as competitive advantage and higher customer satisfaction are major contributors to a project’s success.
  • Business and IT are becoming more aligned on BPM projects.

He also commented on the convergence that is happening in the marketplace, something that I’ve been seeing for some time as well: 130 BPM vendors all attempting to jostle their way into what I call the “BPM suite spot”:

This convergence is just a continuation of the evolution of BPM that I discussed in an earlier post, but it’s going to get a lot more painful for some of the players as they get eaten by the competition or body-checked off the playing field.

BIJ online edition

Business Integration Journal (formerly EAI Journal) now makes their magazine available via free email subscription, for those of us who are not in the U.S. and therefore not eligible for a free paper subscription. A lot of the content is “advertorial” written by vendors, but there are a few gems in there, such as this month’s article on process-centric business intelligence by Keith Gile at Forrester Research, wherein he tackles the problem of out-of-context BI data by looking at ways for BI platforms to associate data with processes in order to deliver decision-making capability to the operational level.

Given BIJ’s policy of not publishing PDF copies of the current edition’s articles on their website until the next month’s edition is available, this e-subscription is the only way to get the content in electronic format at the time of publication, and I actually prefer an electronic copy of these “read and toss” magazines anyway. I think that I was sent an invitation for the subscription, but have no idea why; poke around on their site and you’ll probably find something. They also have issues back to January 2000 online, some of which are really a blast from the past.

My only complaint is that the e-subscription issue is hosted on Olive Software’s “ActiveMagazine”, which is really not a nice way to read online. It also doesn’t produce very readable copies if I print to PDF, so if I want to save a copy of an article or send it to a client, I have to either put up with the poor quality or wait until next month for it to come available on the BIJ website.

Putting the “business” back in BPM

Yesterday’s article on Coors in Intelligent Enterprise piqued my interest by combining beer and BPM, although I confess that I am highly unlikely to drink an American beer regardless of how efficiently it is delivered.

What I found particularly interesting is the description of how they first approached their BPM efforts, starting in 2000. They have a Director of Business Process Management, who by their own description was “spearheading an IT-led supply chain improvement project, but the team wasn’t collaborating with business users”. Did someone make a mistake about this guy’s title by using the word “business” in it, when he was actually an IT person working on an IT project with little or no business interaction? At the same time, they hired a business architect to do process modelling, but with no coordination with the related IT project.

The story has a happy ending: boy meets girl and they share business process models to great success. However, this same story is playing out in organizations everywhere, and many are far from a happy ending. Due to the inclusion of all manner of application integration and middleware products under the global BPM naming umbrella, many “BPM” projects start as IT-only EAI, with little or no communication with the business side of the organization, and allow IT to seize control of all subsequent BPM projects. BPM products are selected based on IT’s criteria, then “business process management” projects are built purely by IT, with sufficient arrogance to believe that they understand enough about the business that they don’t need interaction with the business units.

These organizations inevitably end up wondering why the success rate of their BPM projects is so low. It’s simple: they need to put the “business” back in BPM.

Caution: rogue TLAs

I was listening to a presentation on IBM WebSphere today when the speaker, Deon Newman, IBM’s Director of WebSphere Marketing and Communications, made what I consider to be an excruciating misappropriation of a TLA. (I know, two consecutive posts about IBM: consider it a statistical anomaly)

First of all, the presentation was supposed to be about using WebSphere to automate business processes, that is, business process management, or what most people who have anything to do with process-based technology would abbreviate as BPM. However, it was very narrowly focussed on using WebSphere MQ V6 for the EAI (system-to-system) portion of BPM, in spite of a nice boilerplate slide on integrating people, processes, information and applications. Fair enough, still some interesting information, but if these MQ guys are going to join the party, they have to realize that MQ-type EAI is part of a larger BPM picture.

To confuse things further, there is a field of business intelligence and analytics called business performance monitoring — also abbreviated as BPM — which is what we used to call executive information systems (EIS) or decision support systems (DSS). Within the process world, the monitoring of business processes and performance is referred to as “business activity monitoring” (BAM), probably to distinguish it from the “real” BPM, and because it can include raw activity data as well as aggregate performance measures. The upshot is that for process-centric players, BPM means business process management, and monitoring of the processes and other performance measures is BAM. Gartner published an interesting report on the convergence of BPM and BAM last year, but they still classify them separately, and under those names. To clarify the overlap, a BPM system may include “BAM Lite” capabilities for monitoring the processes that it models and executes, but a full-on BAM system allows for inputs from several systems, including BPM systems, to create an overall view of the business activities. Of course, there’s also another BPM, business process modelling, although that is widely accepted as part of business process analysis (BPA) because of the round-trip nature of modelling and simulation.

Anyway, at the end of the presentation, Mr. Newman was asked a question about whether WebSphere MQ included BAM. He started his response by re-labelling BAM as “business process monitoring” and stating “We use the moniker ‘BPM’.” Huh? A third, slightly different meaning for an already overloaded TLA? Tsk, tsk. I was left with the feeling that either IBM doesn’t really have a clue where WebSphere MQ fits into the world of BPM (that’s business process management), or they’re not paying attention to anything that anyone else is saying, or they’re attempting some creative marketing spin.

I’m not beating up on IBM specifically, I’m beating up on the marketing department of all vendors who misuse commonly-understood terms or invent completely new ones, to the detriment of the businessperson who is trying to wade through all of the doublespeak. Although some part of what I do with any customer is to sort out vendor terminology and product taxonomy, it’s not always a very exciting part (for me), and I wish that the vendors could just follow some basic guidelines for not confusing the customers. Like agreeing on their TLAs.

IBM tops AIM market, but what of BPM?

A press release this week from IBM announces that a preliminary Gartner report on application integration/middleware (AIM) and portal software has crowned IBM as the market leader based on 2004 licence revenue. Their figures put IBM’s share at around 37% of the worldwide market, with chief rivals BEA, Oracle and Microsoft trailing far behind at 7.2%, 4.4% and 4.3%, respectively. The full report is due out at next week’s Application Integration and Web Services Summit.

As you poke around in the data, however, you find out that the number is made up of several products, including application servers (where they compete with BEA), integration software (where they compete with TIBCO, Microsoft BizTalk and webMethods) and portals (where they compete with Microsoft SharePoint). In fact, I suspect that anything that carries the “WebSphere” brand is considered part of their AIM stable, including ongoing licence fees for tons of pre-WebSphere-era MQSeries installations connecting ancient IBM mainframes using proprietary protocols. If you check out IBM’s software product list, there’s a whole lot of WebSphere going on, and it didn’t all start under that brand. In fact, I remember when what is now WebSphere MQ Workflow was rebranded from “FlowMark” to “MQSeries Workflow”, prior to its re-rebranding as WebSphere a year or so ago. Since MQSeries was the hot new brand at the time of the first rebranding, it was seen as an attempt to “standardize by branding”, although FlowMark wasn’t even based on MQSeries until much later.

From a BPM standpoint, the biggest complaint that I have about IBM’s products is the apparently piecemeal strategy. In recent years, we’ve seen a number of products put forward by IBM as BPM and/or workflow: WebSphere MQ Workflow (a somewhat clumsy workflow product that never really developed into a cohesive contender), Content Manager’s Document Routing (a very simple routing capability for document-based workflows), Lotus Workflow (I’m not even going there), Advanced Workflow (now apparently being sunsetted), and the latest entrant, WebSphere Business Integration.

WBI, previously called WebSphere Process Choreographer, is based on the CrossWorlds EAI product acquired by IBM: just type in www.crossworlds.com and see where it takes you. Because of that origin, it’s coming from the EAI space, and my concern is that the product focus will remain on integrating systems and will never fully develop the human-facing functionality, including business-focussed tools for modelling, simulation and analytics. Gartner’s 2004 magic quadrant for pure-play BPM doesn’t mention any of the IBM products, although they did show up in the 2004 magic quadrant for business process analysis due to the Holosofx acquisition.

If this is going to be the next-generation BPM product, IBM needs to stop spending so much time listening to the IT departments (who get far too excited about EAI) and spend more time listening to the business departments in order to develop the human-facing components that they need to move into the pure-play BPM market. At the very least, they need to perform a mercy killing on MQ Workflow as soon as possible to reduce customer confusion and focus their efforts on a single BPM product offering.

Of course, there’s always going to be some platform limitations to WBI: it’s going to require WebSphere Application Server and WebSphere MQ. Given the market penetration of WAS and MQ in large organizations, however, I don’t see that as a problem; the opportunity to grab a huge BPM market share is theirs to blow.

The Case for BPM

Another interesting lunchtime webinar today, “The Case for BPM”, this one featuring Janelle Hill, a VP & Research Lead from META Group (acquired by Gartner as of last week), and Gary Morgen, a VP from Citigroup. It was sponsored by TIBCO, but the first two speakers ran overtime and the poor TIBCO guy had to squeeze his 11 slides into about 30 seconds. Some would say that’s all the time that a vendor should have in an educational webinar, but come on, give them a break, they paid for it.

I really liked Ms Hill’s focus on tying process improvements (and hence the use of BPM) back to business performance objectives or a process improvement methodology such as Six Sigma: although that might seem obvious, there’s a lot of people who get wrapped up in the cool technology and lose sight of what we’re actually trying to do here, which is to improve someone’s business.

I disagree with her broad description of a BPM suite as “unifying workflow, EAI, document/content management, portal and web services technologies”, because I don’t consider content management or portals to be a part of BPM, but rather complementary technologies. Given that we’re migrating to an SOA world, however, the boundaries are starting to blur.

Mr. Morgen talked mostly about Citigroup’s TIBCO/Staffware implementation, but he also had some great words about reducing time/cost of application development by using best-of-breed vendor solutions rather than building it themselves: a refreshing viewpoint to hear from the financial services world, where huge organizations have spent billions of dollars in the past writing their own word processors and database engines. I’ve written previously about the value of using COTS components such as e-forms, so I’m completely aligned with Mr. Morgen’s views on this subject.

I also like the cool Blackberry integration that they’ve done to their workflow, although I don’t want to appear too wrapped up in the technology.

TIBCO will be making this webinar available for download or replay on their website soon; even if you’re not interested in TIBCO/Staffware specifically, I recommend listening to Janelle Hill’s portion for a reality check on establishing your business drivers for BPM.

Also, it will be interesting in the months ahead to see how Gartner and META reconcile their sometimes very different opinions on BPM.