BPM: Approached with caution
One year after the ITWeb BPM survey concluded that the South African market is in a stage of maturity, we speak to key players about the challenges remaining.
ITWeb`s business process management (BPM) survey, conducted last year, reflected the South African market to be in a maturing stage and identified return on investment (ROI) and misconceptions as key challenges. A year later, we look at how vendors are addressing these challenges.
Until recently, BPM has almost exclusively been the domain of big business. Large corporate clients drove the demand for process management, and the solutions provided ran into the millions, and sometimes tens of millions of rand.
Times, they have a-changed though, and we are seeing more solution providers turning their attention to the small and medium enterprise (SME), with many large providers clutching at this sector. The move is away from the traditional, monolithic (and expensive) approach, to scalable, business-driven solutions that are available for smaller clients too.
Scepticism surrounding BPM is still rife in the international market and SA. "Everyone is cautious, but they are starting to make moves towards BPM," says Dennis Parker, VP for K2.net and SourceCode UK. "The only difference in SA," he continues, "is customers are perhaps a little more cautious when evaluating return on investment (ROI), given our local economy. Other than that, the South African market is maturing along with the rest of the world."
"We find the South African market is pretty mature in terms of workflow," says Amir Lubashevsky, director of Magic Integration. "The financial sector is certainly very aware of the need for, and challenges facing process management and workflow automation. The manufacturing industry is, in most cases, as aware as the rest of the world. The retail sector is the only one that can perhaps be said to not be as progressive as its global counterparts."
One of the key challenges facing BPM adoption is the perceived lack of proper process metrics as enablers for the measurement of ROI. Returns on BPM solutions are largely intangible, although the benefits are mostly apparent.
The South African market is maturing along with the rest of the world.Dennis Parker, VP, K2.net and SourceCode UK
Furthermore, solutions must be business-driven. The traditional bloated and IT-driven approach is no longer acceptable and corporate business people understand that IT is just another cog in the wheel and are fairly able to analyse technology-based solutions themselves. If they aren`t, their CIOs are.
"One of the key aspects of measuring ROI with regard to the implementation of a business process is whether or not the process is, in fact, a good one," says Carl Krauss, senior middleware consultant for Oracle SA. "We have had cases where customers have been able to realise true ROI within very short time frames. One could, of course, argue that these cases are mostly technology independent and the implementation was based on a sound knowledge of the client`s business requirements, coupled with an accurate 'guesstimate` of the process itself. Conversely, there are also companies that have been trying to implement BPM for as long three years, and have only been successful in implementing a few processes."
K2`s Parker says part of the value regard has to do with BPM`s legacy. "It`s a market that has been dominated by heavy-hitting consultants for a long time. Lots of money has been spent with little tangible return. The technology involved has come from a small pool of vendors and with a very high price tag.
"A lot of organisations are sceptical when it comes to ROI," continues Parker. "When you present them with the costs of converting paper-based lead forms to electronic form, for example, they quite often raise an eyebrow and decide to stick with paper. This is why solutions must be based on a familiar stack and integrated into existing environments, making the value apparent within a known environment."
SAP`s approach is to revisit BPM solutions with a greater commitment to service-oriented architecture (SOA).
"ROI is a big challenge for the IT industry across the board right now, not just in BPM," says Simon Carpenter, SAP`s director of strategic initiatives. "We have a strong focus and priority at the moment for value engineering.
"Our model looks at the lifecycle of the customer," he continues. "We make use of tools that assist in assessing value at the outset of our engagement with the client. Those predictions are documented and then continuously evaluated. Changes are made to our client-specific solutions as this evaluation continues. But to facilitate this, we`re not getting techies on board, we`re getting business people. The monolithic, IT-based approach is certainly a thing of the past."
Quick to blame
Corporations are often too quick to blame the vendors for not providing value and pushing convoluted solutions. However, it is often these potential clients who are themselves guilty of not knowing their own processes, much less what degree of automation and process management required.
ROI is a big challenge for the IT industry across the board right now, not just in BPM.Simon Carpenter, director of strategic initiatives, SAP
Says Oracle`s Krauss: "When viewed from a holistic perspective, failed projects often find their blame more with the people than with the technology. It is also true that many traditional BPM solutions did not lend themselves to quick and easy implementations, and it therefore became a more IT-driven implementation process. Unfortunately, this perception inevitably stuck with the market. In order to cater for this, we [Oracle] typically allocate at least 60% of project time to assist with the modelling and optimising of processes on a purely business level."
This approach is becoming general practice for BPM vendors and providers. It is also highlighting client-side problems. "One aspect that has emerged is the realisation that many customers have very few, if any, business rules bedded down," explains Krauss. "A prevalent misconception is that business rules and processes are one and the same. Processes need to be built according to, and governed by, business rules. Rules engines such as Fair Isaacs were designed precisely for this reason. Thus, the thought paradigm should be one of determining and laying down the rules first, and only then mapping out the processes."
Not the Holy Grail
However, this does not presuppose that modelling is the Holy Grail of efficient business process implementation," he insists. "Something that many customers are realising is that processes are fluid and dynamic. As a consequence, the underlying technology needs to be able to cater for an agile environment. With the advent of SOA, it has become apparent that processes which enable quick and efficient service delivery need to have the ability to change quickly, and on the fly, without affecting the service delivery environment. Having said that, BPM never was, and never will be the beginning and end of an SOA. It is merely an enabling component and would typically need to be augmented with other aspects such as enterprise application integration, and security and access.
"The difference is that a business owner now has the ability to define a process based on a requirement defined by the consumer, which can be supported by current technology," he says. "It is interesting to note that BPM, against the backdrop of a SOA, has evolved beyond the routing of documents and the allocation of tasks, to include the orchestration of services that are exposed by applications.
"BPM is hence separated into two environments: The first environment is where processes are defined and compiled, and the second environment, being of a more technical nature, is where services are built and deployed to a registry where business users can pick them up and merely do the orchestration.
"The irony is there is still very little business involvement in the definition of both the rules and processes. In many instances this is facilitated by the architecture teams, which often means the necessary executive buy-in is either limited or non-existent. There are, of course, those companies that have realised the benefit of allowing business users to do what they are good at, while at the same time, allowing IT to get on with the job."
Magic Integration`s Amir Lubashevsky believes emphasis should be placed on process analysis and, more specifically, user monitoring. "It is vital to assess the quality of a client`s processes from the outset. Part of this requires monitoring the employees within that process cycle. Sometimes the processes are just fine, but the problem lies with the people using them."
He insists that a major problem exists because not enough auditing takes place. "This is why we introduce technology to do event-driven process monitoring. Any event can be defined depending on the business, like money depositing at a financial institution, for example. That event triggers a process and cannot be dependent on systems that are disconnected. Processes must be monitored and everything audited. If the process is not efficient enough, then we need to revisit the cycle. Part of our emphasis is in protecting companies against these problems. Where most are vulnerable is in the lack of process monitoring."
"It`s important to build business intelligence solutions that are easy to use and also integrated into the tools that workers use everyday, in this case Microsoft Office," says Heather Third, business group lead information worker for Microsoft SA. "Part of the Office '12` offering is Microsoft office Sharepoint, which aims to be a comprehensive BI portal."
A prevalent misconception is that business rules and processes are one and the same.Carl Krauss, senior middleware consultant, Oracle SA
While the software giant maintains a firm grip on the market, some BPM vendors are making sure their solutions are friendly to platforms besides just Windows. "Browser-based solutions are a good way of doing this," says K2`s Parker. "And K2 is accessed primarily through a browser, meaning it is platform-independent. However, our analysis shows that if Microsoft is to lose any ground in the market, it is not going to be anytime before 2009. In our belief that BPM change management is levered by integrating solutions into a familiar environment, Microsoft Office is certainly part of that environment right now."
BPM should drive strategy, not operations
BPM is not just a catalyst, but an enabler of business processes, according to Susan Tredoux, product director, COSA, which provides BPM solutions for a variety of vertical markets.
It`s important to build BI solutions that are easy to use and integrated into the tools workers use everyday.Heather Third, business group lead information worker, Microsoft SA
"Operational BPM can improve the efficiency and effectiveness of certain business processes, but there will be no corresponding upturn in revenue or profit because these changes are not universal and do not deliver what the client wants. An effective business process is one aligned to the customer, and it must define his experience of the company."
She adds that naturally, this is easier said than done, as most people prefer to keep doing things as they always have. To make effective use of technology to improve business requires change, sometimes even radical change. BPM and the technology associated with it must become more strategic in nature.
"The first step in achieving this change is for business leaders to take a step back from the daily grind and look at the company from an objective standpoint. Trying to optimise business units, such as an attempt at streamlining HR processes, for example, is a dead-end that will do very little in terms of long-term benefits," explains Tredoux.
The way to start improving business processes is from the top down, asking what the company is doing and what it should be doing. The correct BPM process will give management the opportunity to define key performance indicators for the organisation as a whole and then derive further goals for divisions and departments (even down to the level of individual employees if necessary).
"Working from a strategic, 'big picture` goal of what the business is there to achieve will allow managers to define their processes and manage them with this single vision in mind. If a business process does not add value to, or support the ultimate goal of the company, what is its purpose?" she asks.