Forrester Day 1: Packaged Applications panel

We finished up the day with a panel of Forrester analysts addressing the issue of whether packaged applications (i.e., ERP software) will ever be designed for people and built for change — that is, can these apps ever be agile. This was structured as a debate monitored by Merv Adrian, pitting Sharyn Leaver on the business side against John Rymer on the IT development side.

Adrian started by repeating the four principles of dynamic business applications that Connie Moore discussed this morning, then framed some questions for the packaged application version:

  • Will packaged applications contextualize work using unitary but dynamic workplaces?
  • Will packaged applications enable up-front customization to meet unique customer needs? (The feeling is that apps will be customizable “at the edges” only in order to allow for future upgrades/agility)
  • Will packaged applications enable ongoing adaptation for continuous business evolution? (Yeah, right)
  • Will packaged applications allow development and change by business people and IT professionals in cooperation?

Leaver and Rymer duked it out over each question, providing some really interesting viewpoints. It wasn’t exactly impromptu; each question had at least one backup presentation slide from one of them to make their point. They ended up with a slide comparing the four application biggies: Oracle, SAP, Microsoft and IBM.

From my standpoint, this was the least interesting presentation of the day, since I don’t focus on packaged applications, although it was an interesting “he said, she said” debate format. The general agreement is that the gap is narrowing between build and buy+customize, but that most customers will still require customization for competitive differentiation.

Tom Pohlmann popped back up at the end of the day with some closing remarks, then directed us off to the vendor showcase reception and the pool party. Given that it’s only 21C here in Carlsbad — compared to a balmy 28C back in Toronto (even though it’s already after dark there) — I don’t think that anyone’s going swimming tonight. Since I’m still on Eastern time, I’ll probably be asleep by 9pm again tonight.

Forrester Day 1: Automating Business Processes panel

Connie Moore moderated a panel on automating business processes, featuring David Knapp of Ford, Pamela Rucker of Philip Services and Theo van den Hurk of ABN AMRO. The room is considerably less crowded than this morning, so I’m guessing that there’s some golfing going on (probably all the CIOs whose golf games were rained out last week at the Gartner conference in Orlando). I really like how they use the big projection screens to show live video of the panelists; I’m sitting way over on the side to score some power for the laptop, so can’t see two of the presenters directly.

Moore talked about Forrester’s BPM maturity framework, which I’ve never seen before but it’s similar enough to BPMM and others that I’ve seen: moving from process knowledge to process efficiency to process consistency to business optimization to business transformation, where most companies are in the efficiency stage, moving towards consistency.

Each of them told a bit about what they’re doing with BPM:

  • Ford is another Lombardi customer that’s just getting their implementation started (it’s sort of ironic, considering that Ford pioneered the concept of the assembly line, that they’re only now getting around to business process automation). They’re a big Six Sigma shop, and are looking at getting some automation and metrics in place, then drive towards optimization using BPM. They’re using BPM in large part for orchestration of their existing legacy systems.
  • Philip Services has a mandate to innovate, but no extra budget to do so, which is a common problem in organizations; they don’t use BPM software but are effectively building their own in code or within the enterprise systems.
  • ABM AMRO is using SAP and Oracle as their enterprise systems, and as far as I could tell, they’re not using a BPM suite to orchestrate that but are relying on the processes within those enterprise applications.

Knapp showed an interesting slide if how BPM bridges the gap between end user computing and full-on IT application development; I think that there’s also an overlap between mashups and BPM at some part of that spectrum. Ford has an enterprise process committee that looks at process management across the organization, especially focussing on the discontinuities (hand-offs between functional silos), and decides which processes to implement. However, they’re still narrowing down and deciding which processes to implement.

Rucker said that two major issues for them was having the business take ownership for business process management, and getting away from siloed process optimization (like the accounting department) to look at end-to-end processes (like order to cash). They even got the CEO involved to drive home these points home to people.

van den Hurk talked about the complexities introduced by having several outsourced vendors involved in their systems as well as their own IT people; just getting all the stakeholders to sit down together was a challenge. ABN AMRO looked at heat maps for operational budget areas to figure out where the money was being spent, as well as what the business reported as the pain points.

There was a question about metrics, monitoring and dashboards: Ford is designing it into their systems; Philip put it in after the fact when they realized that processes weren’t improving and had no visibility into why; ABN AMRO also is building it in based on the business needs.

As panels go, this was pretty conversational rather than a series of mini-presentations: good to attend, but harder to blog about in a coherent fashion.

Forrester Day 1: John Rymer

John Rymer, who I’ve read before on business rules topics, talked to us about why we should care about business rules software; Forrester’s position is that business rules are a key enabler of design for people, build for change.

He started with definitions of business rules and a business rules platform, then went on to state that business rules are an alternative to conventional programming: with business rules you don’t have to translate business terms into geek speak, and you don’t have to specify every possible combination of rules works. The implications are that business people are most likely to get what they need since they can actually understand the “language” in which the rules are written, and more complex problems can be more easily solved with much less time required to change systems. Software can even adapt based on the results of the rules; BPM is just one example of this, but business rules can be applied in the same way in other types of software.

Rymer showed how business rules can be applied in the areas of the “perfect storm” that Connie Moore mentioned this morning as causing the transformation that’s underway now: design evolution (rules add adaptation to context and design), process evolution (rules enable decisioning, auto processes, closed loops), workforce evolution (business people contribute to rules) and software evolution (rules enable global policies for SOA, service selection). He went on with a great list of how organizations benefit from business rules:

  • Create applications that adapt; automate decision in response to business conditions
  • Create applications that change quickly; one set of business rules for all applications rather than having the rules spread through a number of different applications and code sets
  • Tackle the next automation frontier, decisions; capture the wisdom of the experts in rules where possible
  • Put analysis to work through automation: take action using business rules and BPM

He gave some good examples from financial services, showing how business rules have been applied to core tasks such as credit scoring and underwriting, then expanded to areas such as fraud detection and call center programs.

He highlighted that business rules allow organizations to divide change management responsibilities, where business people take responsibility for maintaining the more volatile rules and processes, whereas IT remains responsible for maintaining the core rules and processes.

He ended up addressing the issues of why business rules haven’t really caught on; I see so little acceptance of this with many of my financial services customers and I’m not surprised, although it seems strange that a technology that can offer so much benefit is being ignored by so many companies. The top reason for not implementing business rules? “We don’t do things that way”, that is, they like to write their rules in Java code instead. He also cited lack of standards, high product cost (which I still don’t think is more than writing and maintaining that Java code), lack of participation from the big vendors, and a still-shifting landscape as other reasons for resistance to business rules.

Like Rymer, I believe that business rules will be a significant part of any agile organization. In some cases, organizations already have business rules software but it’s hidden away in one department, but you need to pull it out of the closet and put it to work. Forrester has a Wave (product comparison) for business rules, but he admitted that it’s a bit out of date; it sounds like a new one might be coming out shortly.

Forrester Day 1: Rob Koplowitz

Lots of choice in the breakout sessions, but I’ve decided on Rob Koplowitz (who works with Connie Moore) on Web 2.0 and Social Computing in the Enterprise. The official statement:

Enterprise Web 2.0 can drive new efficiencies, but it needs to be approached like any new technology coming into the enterprise.

He had a good slide on how Web 2.0 changes group dynamics, from reviewed repository (predefined contributors and reviewers with a central point of communication) to facilitated community (clusters of communications with a facilitator in each cluster) to social networks (unstructured peer-to-peer communications).

He made a distinction of four types of social networking technologies: “listen to me” (blogs), “listen to us” (wikis), “find people like me” (tagging, profiles, social networks, virtual worlds) and “find stuff I need” (tagging, RSS feeds). He then went on to discuss which of these adds the most value within an enterprise based on research that they’ve done; after instant messaging, which was really just added in as a benchmark, RSS feeds came in as next most useful, which doesn’t really surprise me give what I’ve been seeing in the past months in the Enterprise 2.0 space. What happens, then, is a combined environment of a corporate information workplace with external sources of information, mashed up using various tools to provide value to users.

He referred to RSS as a lightweight integration fabric within organizations, which is a great characterization, and showed it on a spectrum of enablers that also included mashups, SOA and BPM.

Koplowitz then looked at the risks of Web 2.0 technologies within the enterprise, such as privacy and security; note that he’s talking about using consumer Web 2.0 technologies that are available via SaaS on the public internet, whereas there’s a ton of new Enterprise 2.0 solutions that are sold as on-premise, inside-the-firewall solutions rather than risk an improperly-hosted solution. There’s also many reputable Web 2.0 vendors who don’t do risky things with your data, or not any more risky than your own data center does now. He gave a scary-sounding example using Quechup, a recently social networking disaster that decided to spam your entire address book without permission and was quickly outed and shamed on the internet; this information came out with a few short days of this starting, and if the person involved had just been a bit more careful about watching the internet buzz on Quechup rather than jumping right in with their corporate address book exposed, then this would have been a non-story.

His recommendation is not to stop people from using social networking site, but to be cautious and appropriate about what they put out there, and to audit their behavior to ensure that they’re not violating corporate confidentiality. As he points out, Gen Y’s (18-26 years old) are the target hiring market for many companies these days, and they’re using these tools as creators of content as well as participants. However, the higher-level management in most companies, smack in the middle of the boomer years, are much less likely to participate and hence less likely to fund any related efforts.

Forrester will be publishing some research very shortly about vendors in the Enterprise Web 2.0 space, although he didn’t give us much of a sneak preview except to name a few vendors both in the Web 2.0 space and the enterprise space (BEA, Microsoft, SAP, IBM, Oracle), and predicting a collision. Traditional vendors are following the old-style release and adoption cycles, which may not play very well with the faster iterations that will come from the SaaS offerings from the Web 2.0 space; however, those traditional vendors are also in the position to just start bundling their Enterprise 2.0 offerings into their standard offerings (WebSphere Portal as a mashup platform, anyone?) to encourage adoption with their existing customers. There’s a new breed of vendors, however, that have deep enterprise roots and the agility of the hair-on-fire Web 2.0 vendors, that are likely to give the big guys a run for their money. Most likely, any organization is going to use a combination of vendors, both traditional enterprise vendors (who will be favored in the long run, based on history) and the new vendors (who are likely to be acquired by the big vendors). You’ll also see a combination of technologies, for example, ad hoc processes in a wiki with more structured processes in a BPM system linked to that.

His summary:

  • Enterprise Web 2.0 is part of the Information Workplace fabric
  • Corporations are getting value today from Enterprise Web 2.0
  • Users are getting social without appropriate guidance
  • Process and content need to be managed
  • The investment decision includes change management.
  • The vendors are colliding in this space.

There was an interesting discussion during the Q&A on the place of Google in the environment (Koplowitz thinks they have to solve their security issues first, such as not transmitting data to and from Google spreadsheets in clear text).

He points out that for many organizations that have a significant portion of younger workers, especially in technology-heavy industries, there is no way to put this genie back in the bottle; organizations have to deal with this, and “just say no” isn’t an alternative.

Forrester Day 1: Robert Wiseman, Sabre

The last session before lunch was by Robert Wiseman, CTO of Sabre Holdings — interesting that the two customer keynotes this morning were both by travel-related companies. They have the same problems as many other organizations, in that they have to deal with large numbers of transactions and compete on pricing, but they’re doing it at a much higher volume and with a much greater abandonment rate than most other companies: think about how many times that you use Travelocity (one of their companies) to search for prices versus how often you actually book the travel.

Wiseman talked about how it’s necessary to focus on the differentiators: their business is differentiated by the quality and quantity of content that they provide to their customers, and the level of efficiency that enables the customers to locate and consume the content that’s right for them. Everything else, as he says, is just plumbing. In that plumbing, they push towards a “cookie cutter architecture”, where technology is commoditized which in turn makes for easier build and test cycles, and improves time to market as well as TCO.

They design for technology obsolescence by staying as vendor agnostic as possible, and abstracting the technology layers.

They also design for failure: since they run 20,000 transactions per second, 24×7, all technology will eventually fail, and the fail-overs must be obvious to the operational support staff but transparent to users. The goal, in the case of failure, is to continue limping along in some fashion rather than a total meltdown.

They design for flexibility, using XML-based APIs and web services against some rather ancient mainframe technology; however, they’re now redesigning some of their web services to be less granular (so as to not invoke 30 million web service calls per day) based on tracking consumer behaviour on the website. This is an interesting concept for designing the right granularity of web services: implement your best guess, tending to be more granular, then watch the behaviour and rebuild them into less granular services.

As you might imagine given their transaction volumes, they’re very focussed on performance testing, and designing for the purposes of facilitating performance testing by standardizing hardware (e.g., blade servers) and software (e.g., DBMS) so that it’s possible to test a full range of situations. He stressed how important it is to consider performance testing at design time, not just as an afterthought.

In the Q&A, he talked more about their standardization and reuse efforts: pretty thorough at the infrastructure and even the middleware layers, but not so easy at the application layers. They’ve standardized on Linux, which an audience question referred to as “open source shareware”, which was a bit funny — they’re using a supported version of Linux, so it’s not like they’re pirating software from the internet or something. He also made an interesting comment about how the best strategy for staying vendor independent when you have a single source is to have a really good exit strategy for that vendor’s products: don’t stay with it just because it’s too hard to migrate away from it.

Forrester Day 1: Sandy Carter, IBM

I saw Sandy Carter speak a week ago at the Gartner BPM conference, and as expected, there’s some amount of overlap from what I heard there in the first section on what’s driving business today and the nature of globally-integrated enterprises. Less talk about BPM (since this isn’t a BPM conference) and much more on SOA and how it contributes to these types of enterprises.

She covers off four distinct styles or paths of SOA:

  • Foundational, which is focussed on proven, high-ROI projects; typically there’s only 5% of functions as services, and less than 10% reuse of these services.
  • Extend end-to-end, with optimization and innovation across the entire value chain using BPM, with up to 40% of functions expressed as services, and up to 20% of services reused.
  • Transform, where the business model is being transformed and IT provides a strategic advantage; up to 50% of functions are expressed as services, and up to 80% reusable.
  • Adapt dynamically, where the technology becomes invisible and predictive business functions drive process innovation; more than 80% of functions are expressed as services, and more than 50% are reusable.

She went through each of these in detail, with examples, and talked about how and why each of the approaches are typically selected from both the business and technology standpoint.

There was a booklet distributed to each of us when the session started written by Carter, entitled “The New Language of Business: SOA & Web 2.0”, and she used it as a launch point to discuss enterprise mashups and how they can be used to extend the use of SOA. There’s been lots written about mashups as the global SOA; like BPM, mashups are a primary consumer of services that help to increase reusability and therefore cost-justify SOA in the first place. She showed us some nice services-based mashups that IBM has built for their own internal use; as usual, I wish that IBM would move the internal stuff out to the real world a lot sooner since it seems that they’re doing some really interesting stuff internally that takes years to reach the market.

She then introduced Mohammed Farooz, CTO of the state of Texas, to talk about their Health and Human Services department and the transformational work that they’ve done. They’ve moved from a single channel client interaction model (where each program had its own client interaction) to a multi-channel client interaction where all programs were available to citizens through a common interface, whether they were doing web self-service or calling in to the call center. They accomplished this with an agile business framework (business modeling, capability management, performance management and governance) on top of a flexible SOA stack (Rational, WebSphere and a few other IBM bits).

Carter wrapped up with some comments on end-to-end process integrity — interaction, transactional and information — and how IBM is focussing on this. She showed the same video about Second Life “BPM Flight Simulator” as we saw last week. When they talk about simulating business processes within a simulated environment, I still just have to shake my head, although apparently there’s a greater retention rate for people using this for training versus traditional methods.

Forrester Day 1: Rich Phillips, Maritz Travel

Rich Phillips, the COO of Maritz Travel, was up next to talk about creating consistency and customer value through IT. Although not a part of his presentation, he opened with a great thought about the importance of people in the process: “If you don’t think about the people, you’re not going to get the change.”

His central topic is about BPM: he sees it not just as a different class of software or a different way to manage, but as a breakthrough tool for transforming a business. In a post-9/11 world, they found their business changed drastically, due to shifting customer requirements, supply and demand issues, and regulatory compliance. Instead of just logistics management, they need to expand their systems to cover a number of other key factors, such as compliance management and data management. They undertook some strategic analysis and value stream analysis, and chose Lombardi BPM as a way to achieve some of the benefits that they were targetting. Phillips feels that it provides benefits in the area of reuse of existing systems and processes (through end-to-end process orchestration of existing services) as well as permitting collaborative development involving business, IT and the customer, and enforcing business rules as part of the process. It’s also provided an easier-to-learn user interface, allowing for user training in days instead of months — critical when they need to quickly ramp up for a spike in business.

He talked about a key issue that I see in many companies: the business is motivated to provide what the customer used to want, not what they want now. They’ve expanded their focus on logistics management to provide a more complete suite of services to their customer.

Another issue is that the business tended to abdicate their responsibility for stating what they need to IT, so IT had to just make some guesses about it (which never works out all that well). Now, much like Connie Moore’s earlier comments on how business and IT need to be blended, not aligned, Phillips said much the same thing about breaking down the barriers between business and IT.

Critical success factors that he identified:

  • Business leadership commitment
  • Strategic roadmap: 2-3 years of future view, but with small-enough iterative steps
  • Process definition through mapping
  • Alignment to and support of value proposition
  • Measures of success, macro and micro
  • Iterative refinement
    • Continuous improvement
    • Agile development
  • Embedded process ownership throughout the business areas

He pointed out that they did their first BPM project in 90 days after signing the contract with Lombardi, in contrast to the 2- to 4-year development cycle that they used to have. I’ve seen equally fast implementations with other BPM vendors; in many cases, the key is not the specific BPMS, but the approach that’s taken to implementing it.

The results have been pretty amazing: reversals of their declining revenues, margins and productivity figures, and ability to fine-tune the business process control through the business rules embedded within the process (he didn’t mention another BRE, so I assume that he means the rules functionality within Lombardi). Obviously, a big part of this is the strategic and value chain planning that they’ve done, but BPM is definitely a contributor to their success. They’re now looking at correlating process results to the hard ROI numbers in their business results, such as cycle time, cost per transaction, etc.; this will help them to decide where to focus their efforts in the future.

He went on to discuss a transformation framework, first listing “big bang re-engineering” and “fixing pockets of processes” as flawed approaches. In the big bang approach, it’s mostly a problem in that people can’t make that degree of change without it being massively disruptive to the business; in the subprocesses approach, it’s not enough to make a significant difference. Like the story of the three bears, you have to find that middle approach that’s just right.

Now in their sights for future development is what he calls the real power of BPM: expanding the envelope of the process-managed domain to include revenue generation opportunities, not just cost reduction and productivity opportunities. Although productivity and ROI are important, the C-level executives are usually much more focussed on growth and revenue generation, so it’s critical to look at product development and product/solution delivery processes as well as risk and compliance processes.

Forrester Day 1: Connie Moore Keynote

Connie Moore gave the opening keynote on Design for People, Build for Change: Transforming the Nature of Work. Her focus is on how business and IT have to work together in order to achieve this, but she likes the term “blended business-IT” rather than “business-IT alignment” because she wants them to be seen as a single entity rather than two separate bodies that need to be aligned in some way. I’ve heard Moore speaking at other conferences and on webinars previously, usually on the topic of BPM, and it’s significant that Forrester puts a BPM analyst in the keynote position at this forum: it really drives home that the key focus here is on process.

She posed three questions about this sort of transformation: why now, what underpins this trend, and how will it unfold.

In the “why now” category, she discussed the evolution in design that’s underway in all sorts of consumer products, and asked us to envision what would happen if the leaders in consumer product design (e.g., Apple) came into organizations and set to redesigning enterprise systems. Interesting thought, and something that I’ve written about when discussing Enterprise 2.0, which brings consumer Web 2.0 functionality into enterprise applications. The new generation of workers, dubbed “millenials” by Moore, have grown up with completely different experiences and therefore have completely different expectations about what systems will look like as they enter the workforce, particularly around social networking. Added to all this is the evolution of process management as a discipline, and the dissolution of monolithic business applications into composite applications that use BPM, SOA, business rules, collaboration and other technologies, either on-premise or as SaaS.

As for what underpins this trend, Moore discussed the dichotomy between the detailed transactional type of work (which she characterizes as left-brained) and the big picture type of work (right-brained) that have to be supported simultaneously by our systems. She lays out four key principles for designing for people, and gave a detailed example of each (including a really interesting Second Life example for the 4th point):

  1. Business processes adapt to changing business conditions.
  2. Applications evolve continuously while preserving process integrity.
  3. Processes, tasks and the associated information always maintain context.
  4. Systems are unitary, information-rich and reflect the social needs of the business.

The first two of these are about build for change, and the last two are about design for people

This is all unfolding with the big vendors making some large investments in BPM-related technologies as well as newer things like Web 2.0 and mashups. Cisco’s TelePresence got a huge plug here (I’m guessing that they’re a big client of Forrester 🙂 ), including a clip from 24 that used it. This new focus will require some new skills as well: business analysts need to become process designers, and developers need to become (application) assemblers: this is how design for people and build for change come together. This is completely aligned with what I plan to discuss tomorrow in terms of putting the design of processes in the hands of the business and creating agile processes.

Moore finished up with how to get started on all this, from the viewpoint of IT management, business managers, process designers, application developers, enterprise architects, and the CIO.

Forrester Day 1: Tom Pohlmann Opening Remarks

Tom Pohlmann opened up the Forrester Technology Leadership Forum that I’m attending today and tomorrow, and it’s such an interesting contrast with the Gartner conference of last week. I’ve never been to a Forrester conference before, and the entire feeling is different than Gartner: more fun somehow; they seem to take themselves a bit less seriously while still presenting a professional program. Maybe because this is primarily an IT conference, although there are some people from the business side of process management. There also seem to actually be wifi here, although I have to go to the registration desk to get a login.

The theme of the forum is “design for people, build for change”, with the idea that we all need to start focussing on the people, not the systems — a very similar message that I heard at Gartner last week, where the people in the process gained a lot more airtime than ever before. Pohlmann started right in talking about processes, how then need to change, and how the software that supports these processes need to change in order to support the necessary degree of agility. Interesting that this is not specifically a BPM or process-specific forum, it’s a technology leadership forum, but process is the key issue. The attendees are mostly at the upper management and executive level, and when I look through the attendee list, I find several of my customers and vendors that I work with, as well as many other high-level people from name-brand companies.

Presenters are mostly Forrester analysts, including a few who I know personally and a lot more who I know on the internet; there’s also a few speakers put in by the sponsoring vendors, such as myself: I’m speaking tomorrow, sponsored by TIBCO, although I’m speaking on the more general topic of discovering and modeling agile processes rather than anything TIBCO-specific. I have to confess that I haven’t completely finished my presentation for tomorrow, because I’m really expecting to be inspired by the content today to do a little bit of fine-tuning before then.