Why has the BPMS Market Stalled?

The BPMS MarketAccording to a recent Gartner report after years of double digit growth the total BPMS market declined by 1% in 2012 to £2.3Bn.

So what’s the reason for this decline? Gartner propose quite a few reasons including M&A activity in the BPM vendor market creating uncertainty and the hype surrounding other SMAC (Social, Mobile, Analytics, Cloud) technologies that has had the effect of putting the BPM baby in the corner.

While many of the reasons for the decline proposed by Gartner are valid in my opinion I think there have been two primary reasons for the decline:

The Cloud

BPM was late to the cloud market and remains today primarily an on-premise play.  There were a variety of reasons for this delay and my own thoughts on this can be read here.

For IT leaders evaluating or executing on their cloud strategy a meeting with a BPM vendors pushing on premise deployments must raise some concerns. “Should I really be considering an on-prem BPM investment at this time when my gut instinct and my execs are telling me to focus on the cloud?”

In the long term there’s no need to panic. The BPM market is, I think, in the process of making a right hand turn. As more demand BPM and Case Management process applications emerge e.g. BPaaS and smart process applications, underpinned by a BPMS growth will re-emerge.

It’s the Economy Stupid

Many of the IT planning and funding decisions for 2012 will have been made in 2011 when the economies of both the US and Europe were still struggling to recover from the crash of 2007. The EU continues to recover extremely slowly and it’s noticeable from the Gartner report that the BPM market in Western Europe actually declined by almost 7% in 2012. The economic impact hasn’t just been felt by BPM vendors. Outside the BPM market the Business Intelligence market growth slowed considerably from the approximately 17 percent rate experienced in 2011 to 6.8% in 2012.

What do you think? Is this a temporary blip in the BPMS market or the first sign of a much bigger problem?

BPMS - No Need to Panic

BPMS – No Need to Panic

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Is BPM now a Tactical Play?

Is the future for BPM strategic or tactical? A recent client engagement has thrown into focus a debate that is beginning to emerge about the future of BPM. To give you some background, the client is looking for an expense management solution and is having an internal debate on whether to choose a prebuilt, off-the-shelf application or whether to build their own in house solution using a BPM suite. The accounting department, who will use the solution, are recommending purchase of the pre-built application, emphasizing speed of deployment and lower cost as their key motivating factors. The IT department, who hold the budget, are recommending acquisition of a BPM suite, motivated by the classic BPM reasons of process flexibility and extensibility into other departmental processes. The accounting department is thus looking for a quick tactical play; the IT department is looking at a longer term strategic play.

Is BPM Tactical?

Is BPM Tactical?

BPM has for a long time been regarded as a strategic play. It’s often said that successful BPM projects require both cultural and strategic change within organizations. Establishment of BPM centers of excellence, back office integration and the optimization of processes that cut across multiple departments all require that the organization and its employees are in sync and are willing to review established practices. But all of this takes time, effort and significant cost, creating barriers for widespread BPM adoption, putting the BPM suite out of reach for many smaller businesses.

Increasingly however BPM will be viewed as a tactical rather than strategic play. For example Forrester believe the smart process applications market will be a $35Bn market by 2015 and Gartner expect the business process as a service (BPaaS) market to have grown to $84.2Bn in 2012. While the figures may be so big as to be almost meaningless and a significant proportion of this market will not be BPM opportunities what is clear is that the market for on demand process applications is significant and growing rapidly.

In our personal lives we expect to download an app and begin using it in minutes and with no training. Increasingly we are expecting the same user experience in business. Today this is most apparent in the increased trend towards BYOD (Bring Your Own Device) and BYOS (Bring Your Own Software) and the exponential adoption of generic SaaS applications like SalesForce.com. It was inevitable that business process applications would follow this path.

Process On Demand

Process On Demand

The growing demand for pre-built business process applications is a challenge and an opportunity for BPM vendors. A challenge because any organization with process expertize in a specific market segment can now quite easily set themselves up as a business process outsourcer (BPO). An opportunity because ultimately prebuilt business process applications extend the market for process optimization from medium and large organizations to smaller organizations for whom the cost of a BPM application, development, training etc. is prohibitive.

While the classic strategic reasons for deploying BPM suites will remain, increasingly organizations will deploy process solutions for shorter term tactical reasons. In this tactical scenario the role for BPM will be as a cloud based, on demand, process delivery engine. The future for BPM is tactical.

Forrester v Gartner and the Future of BPM

Long regarded as the software equivalent of the offside rule in football, BPM might just be starting to get interesting. At long last there appears to be some debate happening in the BPM world with a gap emerging between analyst firms Forrester and Gartner on how they see the future of BPM (and Case Management).

First of all Gartner applied the paddles to the BPM corpse earlier this year with the announcement of their iBPMs (intelligent Business Process Management suite). They state that a iBPMs suite has all the features of today’s BPMS complemented with more advanced technologies like advanced analytics, business intelligence, social media and mobile applications. iBPMS use cases will integrate more analytics, social and mobile capabilities into processes making them more intelligent.

Confusingly though Gartner describe iBPMs as a new usage scenario, stating that it should not be compared with their previous BPMS MQ, yet they go on to state; “Our research indicates that the IBO use case represents the future of BPM tools and is experiencing rapid adoption.”

If Gartner have revived BPM Forrester might just have lobotomized the patient, completely changing its personality and how we will view BPM moving forward.  In contrast to Gartner, Forrester have a leaner, packaged, application vision for BPM and have defined a new process category called Smart Process Applications (SPA). These are packaged process apps that encompass many of the characteristics we associate with case management business processes including collaboration and variability. SPA characteristics include ease of use with the ability to be modified rapidly in response to changing business and market conditions. Crucially they expect the cloud to be the primary delivery infrastructure for SPAs making them easier to deploy, support and continuously improve.

Forrester’s confidence in the SPA market is such that they have put their neck on the block stating that they expect Business Process Management suites to be renamed “smart process platforms”.

So what’s my view? Who’s right Gartner or Forrester?

The cloud and the app. internet, as is the case for many SW applications, is a game changer for BPM. In our personal lives we are used to obtaining SW on demand, with little or no configuration required. We will and increasingly are expecting the same of our business software.

Like the software equivalent of Mr. Creosote Gartner’s iBPMS vision sees BPM moving in a different direction, continuing to expand and devour every new or emerging business trend its path. But is a BPMS really the best place for advanced Business Intelligence, Analytics and Social media capability or is it better to integrate with best practice elsewhere?  By adding all of these capabilities are we not continuing to make BPM more complex? Gartner’s iBPMS is a useful BPMS capability reference but iBPMS fails to address many of the issues holding back the wider adoption of BPM suites.

Gartner View of BPM

             Gartner View of BPM

Business process on demand, whether we call it BPaaS or SPA is the future of BPM.  BPM suites will continue to play an important role but increasingly as a cloud based engine for the delivery of on demand pre-built process applications rather than as an on premise application.

BPM in the cloud and BPaaS/SPA transform the business case for BPM applications extending the target market to small and medium sized organizations.  Increasingly organizations will look to these pre-built, good enough, on demand process applications rather than deploy and design their own in house processes. As a result I think Forrester’s leaner SPA vision rather than Gartner’s bloated iBPMS view represents the real future of BPM.

Forrester View of BPM

                                                              Forrester View of BPM