GartnerBPM – Page 6

Gartner BPM: Pursuing Process Agility Goals Using SaaS

Michele Cantera and Ben Pring talked about the compatibility of BPM and SaaS, especially in the key issue of whether process agility can be achieved with SaaS delivery models, or if that’s only suitable for standardized applications and processes.

Pring’s area of expertise is SaaS, and the first part of the presentation was on the SaaS trends in the next five years, and the areas where it will have the most impact. He spent some amount of time defining SaaS (which I won’t reproduce here), how it is confused with outsourcing and hosting, and its benefits. It is useful to consider, however, some of the reasons why companies are moving to SaaS, since these are true for BPM as it becomes available in a SaaS environment:

Too much software and hardware that is purchased but never used.
The high cost of software implementation, particularly the cost of services required.
The hidden costs of IT that drive up the effective cost of on-premise systems.
The emergence of new technologies that enable SaaS, such as grid computing.

SaaS is almost always used to reduce costs, both the up-front costs of the systems themselves and the infrastructure required to support them. However, many organizations have security concerns (which may or may not be unfounded), and there is often a real or perceived reduction in functionality (particularly related to integration) compared to an on-premise system. SaaS is no longer seen as a crazy idea any more — Salesforce.com proved that organizations would put confidential business-critical data in a remote system — and many enterprise application vendors are looking for ways to capitalize on this growing market.

Cantera took over to talk about BPMS and SaaS, starting with the range of different service delivery models from on-premise shared services (which she refers to as “not really SaaS” — you think?), to business process outsourcing (again, not SaaS since the end-customer doesn’t provide the people in the process and/or it’s not purchased on a subscription basis), to SaaS delivery of process-based applications (e.g., Enkata, based on Lombardi TeamWorks, or L@W, based on Metastorm), to an actual SaaS BPMS platform (e.g., Appian Anywhere, or Fujitsu Interstage). In most cases, the process-based applications are fairly rigid to the end consumers; unlike the platforms, which expose pretty much the entire functionality of the equivalent on-premise BPMS, the applications may not allow any process changes, or only limited changes.

She said that she doesn’t see a push to using a BPMS platform via SaaS, but I think that’s a chicken-and-egg problem: Appian’s product isn’t even released yet, and Fujitsu’s seems to be under the radar, so customers either don’t even know that this capability exists or think (correctly) that it’s not available yet.

There are a number of architectural patterns for implementing multi-tenancy BPMS on a single SaaS server:

Each application has its own instance of the BPMS, and its own instance of a repository, but on a shared server. Gartner sees this as the dominant architecture in order to ensure process agility, although at a higher cost due to separate BPMS and repository instances for each application.
Each application has its own instance of the BPMS, but all instances share a partitioned repository on the shared server.
Each application shares a single instance of the BPMS and repository on the shared server (currently, no BPMS vendors support this model).

Cantera and Pring spoke together on what degree of process agility can be expected in a SaaS BPMS environment. They started by discussing — separately — how to determine if SaaS is right for you, and if BPMS is right for you, then looked at the process agility characteristics of BPMS in the various service delivery environments. If we look just at the characteristics for BPMS platforms via SaaS, they indicate a moderate operational cost, high degree of customization possible and therefore high process agility with a low to moderate cost associated with that process agility. The problem, of course, is that the vendors just aren’t quite there yet.

Gartner BPM: Verizon Business Corrals Complexity with One of the Industry’s Biggest BPM Deployments, David Landry

David Landry, Verizon’s Executive Director of Sales Support and Billing Systems, spoke about how they used BPM to simplify and improve Verizon’s billing process. They started with a pretty serious spaghetti mess of contract-to-billing processes: 120 different processes, disjointed legacy systems, manual processes, local variations, and a number of other factors making everything from contracts to billing painful for both customers and employees. Due to growth via acquisitions, they also had a number of overlapping systems and processes.

What they needed was a standardized, simplified and automated process for capturing customer contracts, and mapping that into the billing system so that customers’ bills would accurately reflect the terms of their signed contract. Using BEA’s AquaLogic BPM and Service Bus, plus WebLogic Portal, they were able to streamline the process, reduce staff requirements for manual processing and reduce errors in manual data entry (and re-entry), resulting in $9M in savings from staff redeployment and billing credits, as well as greater customer satisfaction due to the quicker, more efficient and more accurate billing processes.

They had a number of drivers behind deploying a reliable, BPM-based solution: SOX compliance was the biggest one, since they now have better auditing of their processes and other controls, but they also considered flexibility of the process with respect to design and incident escalation, self-documenting processes, real-time process monitoring, automation of some manual tasks, and the ability to integrate multiple systems into the processes.

He ended up with five tips for implementing BPM:

Secure technically capable staff; in Verizon’s situation, the processes were so complex and involved the integration of so many legacy systems that some very sharp IT people were required.
Understand the business process
Secure business buy-in
Be prepared to model early in the lifecycle, and modify the models iteratively throughout the project.
Understand your development model

In their case, the project was very IT-led (including the modeling activities), although it was a collaboration between the CFO’s office and IT. They started the project in May last year, and delivered their first version in December — pretty fast for something of this complexity. They’ll be doing an incremental next version within the next couple of months, and see this as an ongoing process, not a one-shot implementation.

Gartner BPM, State of the BPM Market, Jay Simons, BEA

Jay Simons, VP of Marketing for BEA, presented the results of their recent research into the state of the BPM market, including a survey of 200+ BEA customers, mostly IT people but spread across vertical markets and geographies. They’ve also gathered information through their online BPM Lifecycle Assessment. I had the pleasure of collaborating with BEA on the resulting white paper, which they’re distributing a sneak preview version here at the show and will have more widely available on their website in about two weeks; consider as this disclosure that BEA is my client in case you haven’t checked my disclosure page lately.

The results show a number of interesting trends indicating that CIOs and business leaders are focused on improving their processes. Existing customers described how they expect to get their ROI from their BPM implementations, and most expect to see ROI over the next three years.

The top five trends:

IT embraces BPM enterprise-wide, which broadens the scope for BPM beyond the existing departmental systems, and centralizes the practices around BPM. In general, this is occurring because of the ability of BPM to connect applications into improved business processes; more than half already are or will be connecting BPM and SOA in their environment.
BPM is becoming event-driven, in order to support the event-driven nature of business today. This will result in much more agile processes that can respond to both expected and unexpected events.
Increased focus on knowledge-intensive processes, and using collaborative BPM to enable ad hoc processes both on their own or as an offshoot from a structured process. That includes a variety of collaborative activities, including producing documents, sharing collaborative workspaces, and discussion forums. Over 90% of BEA customers indicated that they have some sort of collaborative processes.
Enterprise social computing (Enterprise 2.0) as it starts to impact BPM, which I’ve been writing about for a couple of years: introducing tagging, wiki, social connectedness and the like with more traditional process management in order to add context and more easily collaborate.
Moving towards dynamic business applications, and how BPM holds a central role in that. Yvonne Genovese spoke in the keynote this morning about the move towards dynamic/composite applications in order to free organizations from the pre-canned logic in packaged enterprise applications, but BPM (together with services exposed in an SOA layer) allows for the fast assembly of applications that are more suited to current business needs.

Gartner BPM: Converging BPM, Web 2.0 and Event Processing, Vitria

I just saw a nice demo of Vitria’s new M₃O release — just hit beta yesterday — that brings an incredible amount of richness and Web 2.0-ness to the interface: monitoring through RSS feeds, very dynamic drilling down and up in process maps, etc. The demo occurred in the context of a short presentation on the convergence of BPM, Web 2.0 and event processing. The process modeler is now browser-based (or so it appeared; we were looking at a screen capture, not the live product), and has evolved into something that could be used by a business analyst. In the past, Vitria has always been pretty focused on the system-centric end of BPM, but it looks like they’re trying to push both the ability to handle human-centric BPM as well as opening up the modeling environment beyond IT.

Thye’ve done some really interesting things in monitoring, particularly through the use of RSS feeds, allowing mashups, and tying data feeds to maps. Creating dashboards and linkages between the dashboard objects is done graphically.

I’m definitely looking forward to seeing more of M₃O: it looks like they’ve done some really nice UI innovations that will definitely push more control into the hands of the business (although their claim that they’re the first vendor to bring together human-centric and integration-centric BPM — and, in fact, that Vitria is the originator of BPM — is a bit of an exaggeration).

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:

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.
Convergence of business processes, people and information: applications that provide business value will consider all of these.
Focus on performance management evolution from reporting and monitoring to predictive planning and closed-loop optimization.
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.
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.
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.
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.
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.
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?

Gartner BPM: Microsoft BPM Success Story, Mario Cataldo, FirstAgain

I stayed around for the 2nd half of the Microsoft session to hear about their BPM customer success story with Mario Cataldo, CIO of FirstAgain, an online lender.

They are doing loan origination, funding and loan servicing processes in support of their online lending operations, including credit modeling and underwriting, but also administrative processes such as invoice generation and email templates.

They’ve made heavy use of business rules within their business processes, looking for ways to minimize IT involvement when business rules change by identifying the areas of frequent change. Since their applications are essentially built in code (rather than, I am assuming, a graphical model), this is an essential contributor to their agility, and he spent quite a bit of his presentation discussing how business rules improve their processes and their selection methodology, which led to their selection of InRule.

They initially started with an unnamed third-party workflow product, but after Microsoft released .Net 3.0 and Workflow Foundation (and after they had already deployed the other product), they switched away from their selected workflow product to Microsoft WF. Since they were already in production with the other tool since 2006, they’ve been stripping that out and replacing it, and plan to go into production soon with the Microsoft WF solution. They converted to the Microsoft product because it gave them better extensibility, performance and scalability, and reduced their costs since WF is included in .Net 3.0.

This is a much more code-intensive type of implementation than what you would see with most BPM suites, since it’s really a workflow extension to a development environment rather than anything like a BPM suite. Having to build your own workflow administration, for example, puts off a lot of people.

There are some good use cases for this mode of implementation, however: one is small software shops with a group of highly capable developers and a limited budget who are more likely to spend money on talent than someone else’s code, such as a startup; this is exactly FirstAgain’s situation. Although they tried out a more full-featured workflow product, it didn’t have the scalability that they needed, and ultimately they preferred to build it themselves. Coming from a software development background, I understand this mindset: if you have a talented team, you can likely build something better for your specific needs right now. The problems come as your requirements shift, or as the BPM market changes, and new functionality offered by full-featured vendors isn’t available to you since you’d have to build it yourself. Realistically, there are many parts of a full BPM suite that you’re just not going to build if you do it yourself on the shoestring budget model; you need to consider if those are important to you or not.

Gartner BPM: Achieve people-ready processes on the Microsoft platform! Burley Kawasaki, Microsoft

Yes, there is really an exclamation point at the end of the presentation title in the published agenda: it looks like Microsoft is as surprised as the rest of us that they can achieve people-ready processes. This is the second of the vendor sessions of the day, and I’m listening to Burley Kawasaki talk about Microsoft’s BPM offerings and vision.

Kawasaki starts by talking about recent changes in enterprises, and how agility is the new competence for the enterprise. He believes that companies are sold on BPM as the right vision, but that cost, complexity and risk limit its adoption so far: placing them far down on the business process maturity curve. I’m not sure that most companies are even sold on BPM as the right vision, although I definitely agree that cost, complexity and risk are inhibiting technology implementations.

And to be People_Ready (as he puts it — obviously, I’m missing some joke in the syntax), he sees some key principles:

Routes of adoption: each initiative is focused on a specific incremental goal, specifically awareness, repeatability, automation or optimization. This totally didn’t make sense until he started mapping each of these routes to a Microsoft product: Visio, SharePoint Designer, Visual Studio/BizTalk and SharePoint Performance.
Collaborative design tools for allowing sharing of models between different roles, although in the Microsoft world this often doesn’t include literally sharing models, but rather import/export of models between environments.
Relevant to the information worker, through integration with desktop environments such as Microsoft Office. Office integration, especially the integration of processes with Outlook, is definitely a hot topic for many of my customers.
Ubiquitous process platform, wherein composite applications are created through the integration of a number of distinct pieces in the platform, whether the pieces themselves are well integrated or not.

It’s this last definition of a process platform that I most object to: Gartner and the large vendors are moving towards this “business process platform” idea rather than a BPM suite, wherein anything with a single vendor’s logo on it can be considered part of the platform, regardless of how it fits together with other components. I just don’t buy it.

Kawasaki finished up talking about the Business Process Alliance, and the growth that its seen with both customers and partners, with over 100 templates and solutions offered for 11 vertical industry.

Gartner BPM: No ‘IT Speak’ Here: How Grassroots Efforts Catalyzed BPM at Chevron, Jim Boots

I came in late for Jim Boots’ presentation on how grassroots efforts catalyzed BPM at Chevron, so didn’t take any formal notes. He had a lot of great information on challenges that they overcame and those still to overcome, key roles, and how they created an empowered employee vision.

My favorite bit, however, was how he presented his key points and subpoints: he used a mindmap type of structure to show them.

I really wish that his presentation was up on the Gartner site; I think that I missed a lot of good points here.