Business Process Management: Global Trends to 2013 (Strategic Focus)
Introduction
Business process management has been a feature of the technology market for the last three decades. Today, BPM is more relevant than ever. The global business environment is increasingly dynamic, pushing organizations to evaluate technologies that can help them respond to business challenges. By adopting BPM, enterprises can boost their ability to derive a palpable competitive advantage.
Scope
*This report outlines the factors driving adoption of BPM, evaluates barriers to entry and forecasts the potential size of market for BPM software.
*Discusses the role of BPM in the current enterprise technology stack.
*Dissects the BPM competitive landscape and outlines the medium-term change vectors.
*Go to market strategies are considered and recommendations on future strategies in a variety of market segments are made.
Highlights
Increasingly globalized and regulated markets are demanding unprecedented level of business process agility, control and transparency. As enterprise application platforms have failed to cater for the needs of highly-differentiated business processes, BPM is emerging as a possible solution.
BPM is still deployed primarily among the very large enterprises in several key sectors as the deployment and management of BPM systems remains an insurmountable barrier for many. However, vendors are experimenting with the innovative BPM deployment and licensing models in order to facilitate the adoption of BPM.
Being both a concept and a technology that caters for a broad variety of user scenarios, BPM cannot be taken to the market with a simplistic one-size-fits-all strategy. Datamonitor emphasises the importance of a carefully calibrated go-to-market approach and customer engagement model.
Reasons to Purchase
*Gain a clear, complete and comprehensive understanding of the global BPM market.
*Identify dominant market trends in order to evaluate opportunities in a variety of market segments.
*Find out how to adapt go-to-market strategies and fine-tune customer engagement in order to maximize potential future sales.
Overview 1
Catalyst 1
Summary 1
Key Messages 2
BPM supports business processes and drives competitive differentiation 2
The pace of business dynamics and application platform inflexibility is propelling demand 2
The BPM market presents considerable growth opportunity over the next five years 2
More could benefit from BPM but complexity remains the biggest obstacle to adoption 2
While convergence with adjacent technologies continues, new delivery modes are tested 2
Scale will matter, but there will be some scope for specialist vendors to compete 2
The diversity of deployment scenarios calls for a complex go-to-market strategy 3
Table of Contents 4
Table of tables 5
Market Opportunity 6
Business process is the basic unit of enterprise activity 6
Globalization and regulation of the markets are driving the business need for BPM 6
The emergence of BPM indicates the evolution of packaged enterprise application suites 7
ERP remains widely adopted but fails to provide a unified business process platform 7
Customers' application portfolios are rarely homogenous 7
Enterprise applications are only addressing commoditized business processes 7
BPM can align IT with the business 8
The focus on alignment reflects both the maturity of IT and the changing business environment 8
The relationship between IT and business needs to be rethought 9
BPM represents a considerable growth opportunity 10
Middleware is currently the least adopted mainstream enterprise technology 10
Organizations with over 5,000 employees are the primary beneficiaries of BPM 10
Those that have already deployed BPM are twice as likely to invest in the future 11
Enterprises with fewer than 5,000 employees are more likely to be investing in greenfield solutions 12
Datamonitor predicts that the market for BPMS software will exceed $3 billion by year end 2013 13
Traditional bastions of BPM spending will persist, although several industries will close the gap 14
Technology Evolution 15
Having evolved through the convergence of several technologies, BPM remains diverse 15
BPMS has evolved from workflow and EAI technologies 15
Convergence with business intelligence, enterprise architecture and social computing will continue 15
Process-oriented composite applications can be assembled on BPMS platforms 15
The boundary between BPM and SOA is becoming blurred 16
SOA is merely another EAI pattern, hence SOA and BPM should remain independent 16
SOA and BPM form a single stack with BPM as the business face of SOA 16
BPM can act as a service-aggregator resolving the problem of service granularity 16
Both BPM and SOA are at their best when loosely coupled 17
BPM is deployed more widely than SOA, albeit by a narrow margin 17
Enterprises are more likely to deploy BPM without SOA, than SOA without BPM 18
BPM can serve as a roadmap to SOA 18
BPM corresponds to the logic tier of a three-tier enterprise stack 19
Modeling, execution, monitoring and presentation are the core BPMS modules 19
Activity monitoring and repositories are increasingly important BPMS modules 20
The acquisition of iLog signals the end of independent BRMS 21
Business rules engines will play a crucial role in injecting analytics directly into business processes 21
Standards for process modeling, execution and exchange are maturing 21
BPMN and BPEL are universally accepted process notation and process execution standards 22
BPMN and BPEL round-tripping remains a concern 22
Serialization of BPMN would boost interoperability 22
Since XPDL cannot reproduce semantics, an extensible meta-model serialization is required 23
BPMN 2.0 discussion revolves around the serialization mechanism 23
BPMN and BPDM will converge and BPEL interfaces will improve 24
Complexity remains the primary obstacle to BPM adoption 24
Unified design environments are required to connect process discovery, modeling and execution 24
New delivery models should lower barriers to BPM adoption 25
On-demand collaborative process discovery and modeling makes the initial steps to adoption easier 25
An on-demand model removes the management overhead associated with deploying BPMS on-site 25
Customer Impact 27
The centrality of business processes renders BPM relevant to many organizations 27
Enterprise applications standardize business processes by sacrificing flexibility 27
User resistance to application rollouts is not mere Luddism but process orientation 27
Lack of process flexibility is the biggest customer pain point removed by BPM 27
BPM automates, executes and governs a wide variety of processes 28
Automation combines functionality and content to enable straight-through processing 28
Content-driven processes channel the flow of information 28
Governance, risk and compliance (GRC) are predicated on process visibility and control 28
Process-oriented composite applications satisfy the long tail of application requirements 28
Process-orientation increases productivity, enables effectiveness and supports innovation 29
Productivity: establish, automate, enable 29
Effectiveness: control, manage, optimize 29
Innovation: transforming the business process 29
IT and business departments could operate more effectively using BPM 30
The concept of a responsive IT infrastructure strategically aligned to the business is resonating with CIOs 30
IT professionals are becoming more business savvy and open to BPM 30
Ease of deployment and poor adoption within the organization remain the principal obstacles 31
Business consulting and business services go hand in hand with BPM 31
BPM success depends on the blend of external consulting and internal capacity building 31
Evaluating the degree of process commoditization is the key to establishing BPM readiness 32
One enterprise's stock process is another enterprise's source of competitive advantage 32
Competitive Landscape 33
The competitive landscape is diverse 33
Principal vendor groups include middleware conglomerates, application vendors and BPM specialists 34
BPM specialists offer BPM suites or best-of-breed BPM modules 34
Middleware conglomerates combine BPM with other enterprise infrastructure technologies 35
Application conglomerates perceive BPM as an important orchestration layer in their stacks 35
Scale matters but other compelling differentiators exist 36
Scale captures market share and caters for the diversity of competitive scenarios 36
Middleware conglomerates have excellent solutions and capture synergies with adjacent technologies 36
BPM specialists can either pursue vertical strategies or seek further process excellence 36
Middleware conglomerates and BPM specialists have a head start against application conglomerates 36
The competitive landscape will be shaped by innovation and acquisitions 37
Consolidation will continue both with fill-in acquisitions and big-ticket mergers 37
Independent middleware vendors may be both acquirers and acquisition targets 37
Microsoft may choose to accelerate the Oslo roadmap through acquisitions 38
There is plenty of scope for innovation in the BPM market 38
Consolidated vendors can innovate by pursuing convergence with adjacent areas 38
BPM specialists can deliver new models of deployment and licensing, and improve BPM standards 38
Go to Market 39
The nature of BPM amplifies the significance of a sophisticated go-to-market strategy 39
CIOs and CEOs still hold sway, but BPM vendors should target CFOs and COOs 39
The role of SOA in a BPM go-to-market approach needs to be considered with care 40
The BPM/SOA deployment and investment matrix should inform SOA up-sell and cross-sell strategy 40
IT/business alignment is steadily growing in importance and could be central to a go-to-market strategy 41
Larger organizations are more receptive to IT/business alignment messaging 41
The right approach to SMEs can satisfy the long tail of demand lower down the market 42
Resellers, ease of deployment and composite applications are the key to SMEs 42
VARs and ISVs are the most apposite BPM channel partners 43
Vendors could help channel partners by lowering the total cost of ownership of BPMS 43
A vertical approach requires industry specialization and the support of business expert communities 44
SAP's BPX is the most successful example of community building 44
Recommendations 45
Remember the 'B' in BPM 45
Connect BPM to dominant business dynamics 45
Adopt a pragmatic SOA strategy 45
Start with process discovery 45
Tap into the long tail of demand in under-served segments of the market 45
Find and exploit competitive differentiation 45
APPENDIX 46
Definitions 46
Methodology 46
Further reading 47
Ask the analyst 47
Datamonitor consulting 47
Disclaimer 47
List of Tables
Table 1: Which of the following technologies do you currently have or use, and which would you prioritize for investment in the next six months? Two years? BPM/workflow 11
Table 2: Which of the following technologies would you prioritize for investment in the next six months? Two years? BPM/workflow by enterprise size 12
Table 3: Which of the following technologies do you currently have or use, and which would you prioritize for investment in the next six months? two years? BPM/workflow and SOA 17
Table 4: Principal process modeling, execution and exchange standards 21
List of Figures
Figure 1: IT alignment has been consistently rated as the top priority IT spending objective 8
Figure 2: Middleware technologies achieve the lowest rate of adoption 10
Figure 3: BPM will continue to be more widely adopted among enterprises with more than 5,000 employees 11
Figure 4: The bulk of investments are made by enterprises that have already deployed BPM 12
Figure 5: The BPMS software license market is set to expand, growing by a CAGR of 14.5% by 2013 13
Figure 6: Telecommunications and financial services will remain the principal foci of spending 14
Figure 7: SOA service granularity can be resolved with a BPM composition layer 16
Figure 8: Formal business process modeling can provide roadmap for SOA roll-out 18
Figure 9: The BPM layer sits between infrastructure integration and presentation tiers 19
Figure 10: BPMS stack reference architecture 20
Figure 11: Current schema of the standard interactions in process modeling and execution 23
Figure 12: IT decision makers are increasingly aware of the need to align IT with the business 30
Figure 13: BPMS is most suitable for highly dynamic / highly differentiated processes 32
Figure 14: Vendors have entered BPM market from a variety of directions (n.b. legacy brands included) 33
Figure 15: BPM competitive landscape vendor segmentation 34
Figure 16: CIOs and CEOs remain the most influential, but both CFOs and COOs have some influence 39
Figure 17: Suggested C-suite engagement model 40
Figure 18: Aligning IT with business goals is a growing concern for CIOs 41
Figure 19: The larger the enterprise, the higher the priority IT/business alignment becomes 42
Figure 20: Channel partners' spheres of influence overlap, but each market segment has a clear preference 43
