The future of BPM spending - where to from here?

According to a recent report conducted by Aberdeen (Worldwide Business Process Management Spending - forecast and analysis 2001 - 2005), the global BPM market comprises of 36 business process management (BPM) suppliers. Of these, 21 are public and 15 are privately owned. What is significant is that an analyst based in the US rated Staffware in the top three BPM vendors in the world.

Although BPM is still an emerging market, it is clear that it is taking roots in various areas such as the deployment of workflow functionality on top of an existing installed base as Staffware is doing. Enterprise application integration (EAI) suppliers have also added workflow/BPM on top of their integration suites.

According to Aberdeen, Staffware`s success can be attributed to operating in process-oriented geographies with limited, if any competition. They predict the BPM market to grow at over 25% each year to 2005 (CAGR) and that Staffware can claim to be the only specialist in the leading group.

In the same way that EAI provides value to the application layer of an organisation, BPM provides value to the EAI technology layer of IT. As such, it offers organisations a compelling value proposition that EAI neither promised nor delivers. Staffware has tackled this through understanding that BPM will be successful if architected as an independent process layer that sits on top of existing IT systems, thereby protecting and integrating with previous investment in technology. Integration should be achieved irrespective of a customer`s chosen technical standards or architecture.

Operational costs is a major challenge facing all businesses and BPM suppliers need to incorporate reporting functions on the platforms themselves as well as measurement tools that are able to illustrate reduced costs and improved efficiencies. This will allow suppliers to penetrate new accounts and extend the reach of BPM across processes, departments and divisions.

Aberdeen also states that manufacturing, financial services, and retail and distribution will be the leading vertical markets for BPM spending through 2005. Collectively, these verticals will represent 57.73% of BPM spending through to 2005 with financial services in the lead with 22.6%. By 2005, financial services will increase its market share leadership position with 25.52% of the market and manufacturing will increase to 19.55%, while retail and distribution will show a 2% decrease from 2002 ending with a 14.5% market share.

According to Aberdeen`s research, the leaders in the BPM space for 2001 are IBM with its large installed base of MQSeries and aftermarket support products, including WebSphere MQ WorkFlow and other supporting technologies (16.4%); FileNet`s Acenza family of products (8.5%); and Staffware`s Process Suite (7.2%). No other product managed to capture more than 5% of the market.

In their report Aberdeen inserts a caveat that the figures for IBM and FileNet might not be accurate due to the difficulty in separating their BPM components from their other product offerings. This is the first time that Staffware has featured prominently in a US-based research.

When looking at the market, it seems that BPM is attracting a variety of suppliers with different backgrounds and product portfolios. Message-oriented middleware, application server, content management, EAI, workflow, CRM and supply chain suppliers are all adding BPM to their products and portfolios. This proves that processes are now being acknowledged as a business imperative for both public and private sectors.

Even though IT spend is experiencing a global slowdown, application integration has become and continues to be seen as one of the top IT spending priorities. According to Aberdeen, the declining economy can spur BPM sales if suppliers implement aggressive go-to-market value proposition strategies. Reducing operational costs through increased efficiencies, greater control and enhanced customer service makes a viable value proposition. To add to this, EAI and BPM are technologies that, although regarded as 'separate layers`, have synergies, which can be exploited by BPM suppliers to incorporate a process-oriented element, resulting in a mature integration infrastructure. BPM provides a business-oriented integration framework that binds IT, operations and business strategies.

BPM is also an important first step towards a service-based model for IT. Another driver that will impact BPM suppliers is the emergence of web services. This new innovation together with grid technology will combine with BPM to allow users to quickly, easily and even invisibly utilise technology resources of all kinds to support their requirements. Users will initiate business processes they require without having to know the name, type or even location of the IT resources that support it.

The Aberdeen Group has not only highlighted the huge potential of this market for leading vendors, but also the dangers buyers face in a fractured and immature sector. With the majority of vendors too small or unfocused to really prosper, buyers must select partners carefully to ensure they get products that deliver results from vendors that will be around in a year to support them. Aberdeen Group predicts a wave of consolidation in the market and it seems likely that the leaders will continue to prosper at the expense of the pack. Staffware is not only the one player completely focused on providing business process management tools, but also has an unmatched customer base of leading companies including Optus, ABN Amro and Siemens Medical Systems all seeing return on investment from its iProcess Engine, today.

Staffware believes that "process is power" and understanding, optimising and managing them is crucial. They also believe that an organisation is the sum of its processes and that the quality of its processes will define an organisation`s success.