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Following our morning break in the beautiful but sadly lacking in hot water (for tea) vendor showcase area is a panel moderated by Tom Dwyer on Transforming to a Process-Driven Enterprise, featuring speakers from Adobe (Ashish Agrawal) and BEA (John Lauck, former president of Fuego before it was acquired by Fuego) as well as the last session’s speaker, Jeremy Alexis. Surprisingly, the speaker from Adobe didn’t show up until 13 minutes after the panel was supposed to start, but many of us think that Adobe is pretty late to the BPM space anyway.

I’ve been tagged by Tom to ask a question early on in order to get things rolling, which means that I’m paying more attention than usual. 🙂 Panels are difficult to blog about because they’re so unstructured and there’s no visual aids, but there’s often some conversational gems that pop up.

The first question was about the business-IT divide, which resulted in a completely expected reply: if you don’t get the business and IT people together, then BPM initiatives will almost certainly fail. Lauck just referred to “SOA” derisively as a buzzword, which was a bit unexpected and did make me laugh — wonder what his current bosses think about that — and then took a swipe at BPEL.

I then popped up and asked how organizations can move from being functionally-focussed to having an end-to-end view of their processes that will move from local optimization to global optimization. Unfortunately, the two vendors appear to have thought that I asked the question “how can I sell more software to my customers”, because they both spoke about how you start with small projects, then roll out other projects across the enterprise and possibly find some efficiencies via shared services. In fact, Lauck said that if you have “grandiose plans” (his words) like modelling your end-to-end processes, then you’ll just be modelling forever. Okay guys, but you’re not answering my question: everyone’s talking about moving from functional silos to process-centric views, but how do you actually do it? Shared services is not equivalent to finding a global optimum. Tom must have known that I wasn’t satisfied, because he came back to me and asked if I wanted to clarify. By then, I was itching to have the microphone back, and said explicitly that I hadn’t asked them how they could sell more software, but that’s the question that they answered, and said that I was interested in Alexis’ view on this since it is really a question about how companies innovate. He responded that leadership is key, which is a sort of motherhood and apple pie statement, and talked about the importance of change management. Okay, that’s closer, but still doesn’t answer the initial question.

A third question came up about how transitioning to a process-driven organization creates winners and losers, and how companies deal with losing people who just don’t fit into the new world order. I think that the question was really about people who can’t adapt to the new way of thinking, which is essentially a change management issue.

As an engineer, I love to hear about design, and I really liked Jeremy Alexis’ talk on a Framework for Making Better Decisions during Product Definition. He teaches at the local Institute of Design (and has a blog about one of his design courses) and acts as a design consultant, and started out by talking about the problem with McDonalds’ ketchup packages — love it, even if it has nothing to do with BPM.

He moved on to some interesting graphs of patterns of good decision quality, and some fatal flaws in decision making:

• Overconfidence
• The endowment effect, where the owner of something feels that it is worth much more than it actually is (all Web 2.0 companies should pay attention to this)
• Loss aversion, such as fear of losing market share if a product is changed
• Horizontal flight/vertical flight: in areas of uncertainty, we tend to ignore what’s important and focus on what we feel more comfortable with
• Groupthink, where not enough outside ideas are introduced and a small group believes that what they have developed is the right thing

He presented some ideas about decision making at the “fuzzy front end” of product definition, that is, during discovery and scoping, where there are few good tools for making decisions, unlike during later points in product definition (business case, develop, validate and launch) where there are a number of robust tools for decision making. He had some great findings from research on decision making at these early stages, such as its ad hoc and unstructured nature and its internal focus, and how these can make things go terribly wrong. Since there are a lot more ideas in the pipeline at the front end, it’s pretty necessary to determine the winners and losers as early as possible.

Alexis showed us a high-level generalization of what really happens during the front-end discovery and scoping parts of product definition, which tends to just create more of the same rather than actually drive innovation. He then discussed a new approach — create an innovation strategy, triage concepts as they are created, and use a consistent approach to evaluate triaged ideas — and drove into detail on each of these steps. He brought together a number of interesting concepts, such as the 10 different types of innovation plotted against a company’s “ambition level” to see which types of innovation that organizations at different levels of innovation ambition should attempt.

He ended up by stating what we in the technology industry already know: that the ultimate goal of most startup companies creating an innovative product is to be acquired rather than taking their company public, and that many large companies are counting on acquiring their innovation rather than developing it themselves.

Tom Dwyer of BPMInstitute.org/BrainStorm Group finished up today’s formal sessions with Enabling Business Process Innovation.

As he pointed out, innovation is what drives company growth, and he listed the types of innovation that can be seen in organizations:

• Business model, e.g., use of shared services centres
• Process and services and markets, e.g., electronic channels
• Operations, e.g., self-service

He covered a number of good examples of some strategic industry initiatives in a number of different industries, and discussed innovation concepts in general before drilling down to process innovation specifics.

He spent some time discussing process-driven companies, which is a topic that everyone seems to be talking about lately: not just analysts and vendors, but customers are starting to ask about this as they see the advantage of managing end-to-end processes rather than chopping them up into functional silos.

He moved on to redefine the acronym “BPO” — universally recognized to mean “business process outsourcing” — to mean “business process organization”. Yikes. There were some great points here for process-driven companies, but the BPO acronym was completely distracting. He had a graph that charted the course to business process excellence, which was a sort of maturity model: “just get by”, “look for efficiencies”, “drive business agility” and “leverage process capital for market leadership”. He also listed some of the artifacts and results of becoming process-driven, from documented process flows, a rules repository and process metrics to customer satisfaction measures. As the scheduled end-time passed, the presentation dove into a discussion of SOA and attendees started to bail out, but Tom wrapped it up with some useful summary points on how innovation helps to create a competitive edge.

The presentation was much too dense with text and statistics for any time of the day, but especially for the last timeslot of the day — the energy level in the room was pretty low. It’s too bad, because Tom had a lot of great information here.

The hotel wifi just kicked in, so I have a couple of posts queued up. I’m at the BrainStorm BPM conference in Chicago, and just flew in this morning so missed the initial keynotes (Enabling the Process-Centric Agile Enterprise and Engineering the Process-Centric Enterprise) but will be here the rest of today and most of tomorrow. One of the complaints that I have about this conference is that there’s just too many tracks: they’re running six sessions simultaneously: two of them forming the BPM conference (BPM for business professionals and BPM for technology professionals) an organizational performance symposium, a business rules symposium), an SOA conference, and a business architecture conference. At any given time, there are at least two of the sessions that I want to attend, sometimes three, and the choices are going to be difficult. Unfortunately, the conference program doesn’t help since it splits the session descriptions into five sections (the two BPM tracks are combined in the program) so that I have to flip around all over the program to compare concurrent sessions. There’s also some organizational issues, and I’m not just talking about the fact that they didn’t have a name badge for me when I showed up: the sessions are spread out over two floors of meeting rooms at the Drake Hotel, and there is zero time in the schedule between many of the sessions. Teleportation was not included.

I’ve just booked my flight to Chicago for BPMInstitute.org’s BrainStorm BPM conference on April 10-11, so you’ll see me live blogging from there (wifi permitting) under the BrainStorm2007 category.