ProcessWorld 2008: Dr. Wolfram Jost

The final keynote of the first day was given by Dr. Wolfram Jost, who has responsibility for the ARIS product line. I have a bit of difficulty sorting out the European titles sometimes; his title is “Executive Board Member responsible for products”, which in North America would translate to “VP of product management” or something similar.

He makes a distinction between the “business layer” and “technical layer” of BPM, where the technical layer appears to be defined as the BPMS and other systems (such as SAP) that are used to execute business processes, and the business layer (ARIS) is used to monitor and manage the performance of the processes. Interestingly, they’re putting performance management ahead of modeling in importance, even though they’re likely better known for modeling; performance management is much more closely tied to process improvement in people’s minds, even though you likely wouldn’t get to that point if you didn’t model the processes in the first place, and the models provide a framework on which to hang the measurement data.

Jost sees a convergence of major improvement initiatives within organizations: BPA/BPM, SOA, EA, BI and GRC (governance, risk and compliance). To address this, ARIS is bundled as solutions to approach these initiatives on top of the base ARIS platform.

He covered some of the new functionality in the upcoming product release with respect to modeling:

  • Versioning of models
  • WYSIWYG report designer
  • Timeline display of models

ARIS Business Architect 7.1 - Versioning and model comparison ARIS Business Architect 7.1 - Time-based modelling

He also reinforced how they provide a standard modeling and performance management platform for a number of different implementation platforms, from ERP platforms such as SAP to BPMS such as TIBCO or Fujitsu.

There’s some completely new functionality in this product release as well, such as the IT Inventory capability.

ARIS IT Inventory 1.0 - Overview

He went on to discuss how by the end of 2008, they will release a process execution environment “for governance processes”, the subtlety of which escapes me somewhat — does that mean that they are about to become a full-up BPMS, or only for specific types of processes? If they do release an execution environment that operates directly from the models in their repository, they’ll definitely annoy some of their  BPMS business partners, but more importantly, they have the potential to become one of the most powerful BPM suites around because of the top-notch modeling and performance management. I have an interview tomorrow morning with someone in product development that should help to clear up my fuzziness on this — tune in then for more.

ProcessWorld 2008: Opening Keynote

Charlie Doucot, head of IDS Scheer’s North American operations, opened the conference by talking about their growth in the past year, particularly in their new and growing partnerships with Microsoft and SAP. SAP has a huge presence at this show — one of this morning’s three tracks is “process-driven SAP management” — and I’m looking forward to seeing more of what they’re doing together, especially since it now looks like I’ll be attending SAPPHIRE in May.

Thomas Volk, president and CEO of IDS Scheer, talked to us briefly about the rise of the operational CEO, who

  • sets objectives prescriptively
  • manages accountability objectively
  • monitors execution constantly
  • sees potential problems early
  • makes adjustments regularly

in order to return shareholder value, increase market valuation, grow the top line, and mitigate risks. He sees ARIS as providing “corner office command-and-control of the operational strategy”, which I think is a great phrase to describe how today’s executives need to keep an eye on what’s happening in their organizations at a high level.

I missed the press briefing this morning (through no fault IDS Scheer’s excellent press relations, but through my own inability to read a schedule), but there were a number of announcements there as well. From their press releases:

  • A technology partnership with Minitab Inc., a quality improvement software and services provider, that will offer joint customers an integrated solution for Six Sigma, a rigorous methodology that uses data and statistical analysis to measure and improve a company’s operational performance, practices and systems.
  • An integrated offering of ARIS Business Architect and the BMC Atrium CMDB product, which enables the design and building of IT Services based on business processes.
  • A process-based solution for the fabricated metals industry that has received official qualification from SAP AG in the United States and Germany – the new ARIS SmartPath for Fabricated Metals.
  • A three-year partnership agreement with the Supply-Chain Council (SCC).
  • The completion of the first phase of a business transformation initiative at Intrum Justitia, a European credit management services company, successfully transforming a legacy application into a Business Driven SOA using the ARIS Bridge integration from IDS Scheer and E2E.

Gartner BPM: Open Research Meeting

I feel like I’m on the last mile of a marathon: it’s the closing keynote of the conference, and it seems like it’s been going on a long time. Gartner may have jumped the shark by moving to two North American BPM summits per year; a lot of the material is heavily recycled, making it much less valuable to repeat attendees (although still very good for first-timers), and I’m sure that the vendors are completely fatigued — both in terms of time and money — from attending two of these each year, plus the one in London. Attendance feels lower than last spring, although more than last fall’s dismal attendance, and at some point the vendors will find that it’s just not worth their time and money to attend both North American BPM summits each year; that in turn will impact the quality of the experience for the end-customer attendees since they’ll see less of the vendors’ customer presentations, and less vendors at the trade show.

I’m hearing Daryl Plummer for the first time this week — not sure how I missed him earlier — as he moderates the open research meeting, joined by Janelle Hill, Matt Hotle, Elise Olding and Jeff Woods. I’ve never managed to attend one of these before, since I always seem to have been heading out of town during the last session. The format is that they put forward a series of strategic planning assumptions, then they are debated by the analysts on the stage and anyone from the audience who wants to participate.

The first strategic planning assumption is that business application vendors that do not deliver model-driven applications by 2012 will be marginalized as application providers. The dominant players — SAP, Microsoft and Oracle — are already moving in the direction of model-driven architecture, but there are still a lot of other ERP applications out there that are not heading that way, and there seems to be a strong argument that four years is just too aggressive of a timeline, especially in vertical industries where there might only be one dominant layer for a vertical-specific application. When it does come, it will likely be driven by the business, since model-driven architecture provides a world of difference to business (although it still has significant benefit to IT).

The second strategic planning assumption is that by 2012, more than half of new mission-critical business functions will be delivered by teams outside of IT through model-driven and agile techniques. Related to the previous SPA, this means that not only will the vendors be providing the model-driven applications, but that the business area will be delivering the functionality based on them, and on inherently model-driven platforms such as BPMS. This, of course, presupposes that the business even wants to lead these initiatives, which isn’t at all obvious since it isn’t happening in a majority of companies now. An interesting debate rose out of this that resulted in one of the analysts stating that “it might happen, but it might not work”, and pointing out that if their strategic planning assumptions don’t have some risk of being wrong, then they’re just tactical planning points.

The third strategic planning assumption is that enterprises that modernize their applications portfolio without a model-driven application focus will spend an equivalent amount of money by 2012 on a second round of modernization to get to model-driven applications. This highlights that not only will it be necessary to move to model-driven applications, but that it’s expensive; there was also discussion that if it’s not model-driven, then it’s not modernization, which seems to be a bit of a stretch.

All in all, I found this session interesting and am glad that I stuck around for it. I think that Gartner is very bullish on model-driven applications, and are overly optimistic about the timelines for how this technology will roll out. I don’t think that there’s any question that these things will occur, but 2012 is only four years away.

Gartner BPM: The New Agile BPM Method, David Norton

This morning, I attended with David Norton’s session on integrating BPM and Agile software development methods. In BPM, we always talk about how BPM brings agility to business processes, but what facilitates that agility? Although a lot of this talk is about Agile, it’s definitely valid to look at how to apply Agile methods to BPM projects, since there’s still some amount of software development in almost every BPM project.

He started with a review of software development methods: architected model-driven (including BPM, where you draw an executable process model rather than writing code to handle work routing), architected RAD, and Agile. He then drilled in on Gartner’s 10 principles of NeoRAD (an example of Agile), such as close involvement of the customer, peer review and an iterative approach.

BPM needs to be a mix of agility and discipline, but not a waterfall methodology that we so often see used by old-style development teams when they take on a BPM project; BPM is predominantly architected model-driven because of the executable process models, but also uses some aspects of architected RAD and Agile since there are integration and UI components that require development beyond just the process modeling stage.

He described the principles of Extreme Programming as a coding methodology, and Scrum as a way to manage agile development projects; Scrum, in particular, has a lot of useful concepts that could be applied to BPM projects. He also covered Dynamic Systems Development Method, a type of RAD framework that includes the concept of turning an operational prototype into the end product to reduce waste and time in the development cycle, and Lean Software Development, focused on reducing waste and defects in the same sort of way as Lean works in the manufacturing sector.

He then looked at how BPM release cycles — continuous cycle of design and optimization, iterations of under six weeks, new policies and rules in a day — and how they are much more aligned with Agile methodologies than the traditional waterfall approach, which typically sees the first release in 4-6 months (in the best possible case). Unfortunately, most development teams inside organizations are still stuck in waterfall methodologies, and third-party professional services firms are more motivated to suggest long development cycles with large development teams. That means that even though the process model might be done as zero-code architected model-driven, the (often excessive) customization that happens in the component/service layer and the user interface drags down the project schedule.

This presentation was really much more about Agile than BPM — sometimes Gartner makes a bit of a stretch when bringing in their analysts from other areas and trying to make them BPM-ish — but if you’re not already looking at Agile development for any BPM-related project, you definitely should be.

Gartner BPM: Business Rules Management State of the Art, Marc Kerremans

Marc Kerremans’ presentation on business rules management started out looking at where rules exist in an organization, and how they are used. In many cases, rules are still embedded within applications — such that changing a rule requires changing the underlying code — or are implemented in a manual and sometimes ad hoc manner. Gartner defines business rules as “implicit and explicit business policies that define and describe a business action”, where implicit rules are those embedded within applications.

He discussed how rules can differ greatly within a single organization based on factors such as geography and the associated local regulations, and how a business rules management system — which manages rules explicitly and externally from business applications — can add value in managing all of the complex rules across an organization.

He also looked at who owns and manages business rules:

  • Line of business managers determine the most volatile rules that may need to be changed to meet business agility needs, define the rules required, and author/change less complex business rules.
  • Systems architects author more complex rules, and test rules to assure that the system is performing as required.
  • Business analysts discover and author new rules based on their analysis of the business health, and create and simulate rule scenarios.

Since 2004, BRE and BPM have evolved from distinct and separate markets to an integration of BRE in many BPMS, to the current state of business rules management systems (BRMS) that go beyond simple business rules engine functionality. Typically, a BRMS contains:

  • Rule execution engine, including execution, sequencing and chaining of rules, and event-based execution.
  • Rule repository, where rules are stored for access by design tools and at run time. This includes security and version control to prevent unauthorized changes to the rule definitions.
  • Rule modeling and simulation, for what-if analysis. This will show effects such as dependencies between rules, and performance tracking.
  • Monitoring and analysis of historical and real-time rule usage, including reporting and audit trails.
  • Rule management and administration, working in concert with the repository, to manage security, promotion between development, test and production environments, and track changes and performance.
  • Rule templates to provide a quick start for specific vertical industry rule sets, and horizontal rules sets such as compliance.
  • Rule integrated development environment, which provides a graphical, model-driven environment for authoring, testing and debugging rules. This may include wizards for easy creation of rules by business managers/analysts, and collaboration tools.

As with BPMS, not all vendors will cover all of the full range of functionality equally well. There are some open source BREs that provide only the engine functionality, such as JBOSS and NxBRE. Most of the commercial vendors, such as Corticon, Fair Isaac and ILOG, are either migrating to the full BRMS functionality or are already there. There’s also an overlap of BPMS that provide BRE functionality: Pegasystems is the most commonly-cited player here since their BPMS is actually built on a rules platform, but other BPMS vendors provide rules that can be separated from the processes to at least allow reuse across multiple processes, although not across non-BPMS applications.

Agility is the primary reason that organizations look to BRM, which can manifest as awareness (accessing and presenting the right information through rules-based event monitoring), flexibility (rule modeling and simulation to handle expected change), adaptability (rapid rule modification to handle unexpected change) and productivity (executing the right policies and procedures).

There are other reasons for implementing BRM besides agility, of course: improving the quality and consistency of business decisions, improving revenue opportunities by fine-tuning pricing rules on the fly, improving customer satisfaction through greater customization, and better regulatory compliance and governance through the use of audited rules and increased visibility into how decisions are made.

Kerremans went through a number of best practices for getting started with BRM, such as analyzing rule volatility, and establishing a process for making changes to rules. As much as possible, try to work with natural language representations of rules so that business managers are comfortable with the authoring environment, although some level of structure to the language (“rules speak”) will be necessary.

He also discussed the different types of rules technology, including inference-based and event-based rules engines, before finishing up with some recommendations on developing a business rules management strategy. As with BPMS, many larger organizations will end up with multiple BRE tools to cover their entire strategy, so don’t assume that you’ll be working with only a single vendor in this space.

For you business rules aficionados, note that I’ve change the business rules category on this blog to DM, instead of BRE.

Gartner BPM: Business Applications Through 2010, Yvonne Genovese

In the morning’s technology keynote, Yvonne Genovese talked about the trends in business applications over the next two years:

  1. Applications shift from pre-canned logic to dynamic assemblies, something that we’re already seeing with large packaged applications (such as SAP) opening up their internal functionality as services, allowing those functions to be consumed — along with any number of other web services — as part of a composite application or business process.
  2. Convergence of business processes, people and information: applications that provide business value will consider all of these.
  3. Focus on performance management evolution from reporting and monitoring to predictive planning and closed-loop optimization.
  4. Business perimeters are becoming porous, with much of the innovation occurring at the edge of organizations: not only will there be interactions with external parties such as customers and suppliers, decisions will be made by those external parties that form part of an organizations business processes.
  5. Users and vendors have opposing strategies since many enterprise vendors are reaching end of life on their applications, so users are going to hold off on significant purchasing in favour of project-based investments.
  6. The role of the ERP suite will change, since they typically provide a low degree of innovation; they will tend to be services consumed by other more agile applications.
  7. There will be growth in alternative software consumption models, such as SaaS, which greatly impacts integration with existing applications and business processes and can impact process integrity.
  8. Process integrity challenges loom on the horizon, which is the fall-out from both dynamic/composite applications that pull services and data from multiple systems, and the move to SaaS applications: consider the challenge of reversing a logical transaction that may have occurred over multiple systems, some on-premise and some SaaS.
  9. Seismic shift in the way that users view software governance: since IT has become a critical competence within many organizations, application development and deployment has to become more predictable and visible to the business that it serves.

The use of templates/patterns that embody best practices for developing new business applications will help create standardization, and therefore predictability. In the BPM world, this includes having a BPM discipline within an organization that links your end-to-end processes to enterprise value disciplines. In general, this is all about keeping a closer eye on what your vendor is doing, and not giving them a carte blanche in building your systems or during major upgrades: their focus isn’t your process integrity, so you need to ensure that what they’re doing won’t adversely impact it.

Also check out my coverage of her presentation at last September’s BPM summit, which covers much of the same ground.

Gartner BPM: The Current State and Future Direction of the IT Industry, Diane Morello

Diane Morello delivered the closing keynote today with IT industry trends:

  • 2007 will end up being the 6th straight year of modest enterprise IT budget growth
  • A growing number of CIOs are taking on new non-IT responsibilities
  • The more things change…

What economic and business trends will prevail during the next several years? No rocket science required to predict that the economy is slowing down almost everywhere worldwide, although a vast majority of CEOs feel very or somewhat confident that their company will grow in revenue, leading me to wonder if we need a survey on what the CEOs are smoking.

She went through five top predictions that Gartner has made for 2008: more green technology, a greater influence of user preferences on IT spending, significant amounts of IT infrastructure and business applications as a service rather than incurring capital expenditures, and (my personal fave), traveling workers leaving their notebooks at home in favor of other devices.

The top two actions for any CIO in the past three years are still delivering projects that enable business growth and linking business and IT strategies and plans, but improving the quality of IT service delivery has leapt from 7th place to 3rd place in 2007 when CIOs were asked how they support business growth. For 2008, attracting IT personnel moves up into 3rd place. Other surveys that they’ve conducted about the future of the IT organization see a further dissolving of the walls between business and IT, creating what they call the hyper-connected enterprise: the focus is on improving business processes and improving the customer experience, while security bugaboos are finally regressing in relative importance.

A key message is that any investment in IT infrastructure has to be justified in terms of its ability to contribute business value. IT leaders are looking to reduce the cost of security, compliance, privacy and risk management without compromising their organization’s operations. Since much IT infrastructure is at least partly outsourced in some way, the question becomes how to manage multisourcing effectively so as to provide value to the business as the most effective cost.

Morello showed a business intelligence maturity model, nearly identical to their business process maturity model, that maps the changing role of BI within organizations. She then went through the most frequently asked questions that they receive from enterprise architects, applications managers and other IT positions. In looking at questions regarding business process improvement, they expect the key question by 2012 to be around how to do continuous goal-driven process improvement without having total chaos. For any type of IT projects, program and portfolio managers need to learn how to prioritize ad hoc projects, since there will be less monster long-term projects and more rapidly-changing ad hoc projects.

She briefly covered the hype cycle for emerging technologies; I’m sure that I’ll be sued (or at least not invited back) if I show the diagram, but you can likely find it on Gartner’s site or by searching around elsewhere. A number of the Enterprise 2.0 technologies that I see as having break-out potential for 2008 — such as enterprise RSS and wikis — have reached the trough of disillusionment and are about to start climbing back up that slope of enlightenment. However, as one BPM vendor who was sitting with me during the presentation remarked, BPM is no longer on the emerging technologies hype cycle: does that mean that it has finally arrive?

More live blogging from Gartner

I’m not the only one blogging from the Gartner BPM summit: I ran into David Straus of Corticon at the first break, and he said that he was blogging as well. You can check out his comments on Janelle Hill’s keynote here, which offers a very different perspective, since he addresses how she didn’t cover operational decisioning at a critical component of business processes.

Even public service organizations can ‘camp

Normally I would just provide a link to this in my daily Links post, but this is such a great example of how Open Space technology (e.g., BarCamp, MashupCamp) can be used for more than just holding geeky tech unconferences: last year, three people from the TorCamp community organized TransitCamp to provide a place for the Toronto Transit Commission (North America’s third largest, serving 2.4 million riders each day) and the local community to come together and generate new ideas about how to really make the TTC “the better way”. Today, the story of TransitCamp, “Sick Gloria Transit”, hit the Harvard Business Review as one of their breakthrough ideas for 2008. The article is written by Mark Kuznicki, Jay Goldman and Eli Singer; Mark’s post also contains a number of reference links, including a page of links on the TransitCamp site covering both unconferences and TransitCamp itself.

I’ve attended several unconferences, although I missed TransitCamp last year, and I’ve been promoting the idea of the unconference as a format for business and technology conferences in the BPM space, but it’s a hard sell. One group of conference organizers that I approached with this had many reasons why it wouldn’t work, even though they have never attended an unconference, and most didn’t know what it was before the subject was broached. One response: “hopelessly techie.” I disagree: the unconference format has been used for many non-technical gatherings since Open Space Technology was first defined in 1986; it’s just that the tech community made it popular in the past few years. To quote the Wikipedia article, it “has been used in over 100 countries and in diverse settings, industries, cultures and situations – for program and product design, knowledge exchange, interdisciplinary thinking, conflict resolution and conferences.”

TransitCamp is a great example of how unconferences can be used with a primarily non-technical group of participants to generate ideas for a definitely low-tech endeavour: improving our local transit.