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Gartner BPM: Open Research Meeting

I feel like I’m on the last mile of a marathon: it’s the closing keynote of the conference, and it seems like it’s been going on a long time. Gartner may have jumped the shark by moving to two North American BPM summits per year; a lot of the material is heavily recycled, making it much less valuable to repeat attendees (although still very good for first-timers), and I’m sure that the vendors are completely fatigued — both in terms of time and money — from attending two of these each year, plus the one in London. Attendance feels lower than last spring, although more than last fall’s dismal attendance, and at some point the vendors will find that it’s just not worth their time and money to attend both North American BPM summits each year; that in turn will impact the quality of the experience for the end-customer attendees since they’ll see less of the vendors’ customer presentations, and less vendors at the trade show.

I’m hearing Daryl Plummer for the first time this week — not sure how I missed him earlier — as he moderates the open research meeting, joined by Janelle Hill, Matt Hotle, Elise Olding and Jeff Woods. I’ve never managed to attend one of these before, since I always seem to have been heading out of town during the last session. The format is that they put forward a series of strategic planning assumptions, then they are debated by the analysts on the stage and anyone from the audience who wants to participate.

The first strategic planning assumption is that business application vendors that do not deliver model-driven applications by 2012 will be marginalized as application providers. The dominant players — SAP, Microsoft and Oracle — are already moving in the direction of model-driven architecture, but there are still a lot of other ERP applications out there that are not heading that way, and there seems to be a strong argument that four years is just too aggressive of a timeline, especially in vertical industries where there might only be one dominant layer for a vertical-specific application. When it does come, it will likely be driven by the business, since model-driven architecture provides a world of difference to business (although it still has significant benefit to IT).

The second strategic planning assumption is that by 2012, more than half of new mission-critical business functions will be delivered by teams outside of IT through model-driven and agile techniques. Related to the previous SPA, this means that not only will the vendors be providing the model-driven applications, but that the business area will be delivering the functionality based on them, and on inherently model-driven platforms such as BPMS. This, of course, presupposes that the business even wants to lead these initiatives, which isn’t at all obvious since it isn’t happening in a majority of companies now. An interesting debate rose out of this that resulted in one of the analysts stating that “it might happen, but it might not work”, and pointing out that if their strategic planning assumptions don’t have some risk of being wrong, then they’re just tactical planning points.

The third strategic planning assumption is that enterprises that modernize their applications portfolio without a model-driven application focus will spend an equivalent amount of money by 2012 on a second round of modernization to get to model-driven applications. This highlights that not only will it be necessary to move to model-driven applications, but that it’s expensive; there was also discussion that if it’s not model-driven, then it’s not modernization, which seems to be a bit of a stretch.

All in all, I found this session interesting and am glad that I stuck around for it. I think that Gartner is very bullish on model-driven applications, and are overly optimistic about the timelines for how this technology will roll out. I don’t think that there’s any question that these things will occur, but 2012 is only four years away.

2008 02 07 Comments (1)

Gartner BPM: The BPM Scenario: A Change from Business as Usual, Janelle Hill

Janelle Hill addressed the issues of what’s really new in BPM and how it can change how you do business. She starts off by discussing how BPM is different from older business process reengineering techniques:

  • Process orientation complements functional organization, along the lines of what Rummler was discussing yesterday: processes overlay functional silos, which drives matrix management so that processes can be managed end to end.
  • Processes must be effective and transparent, not just efficient.
  • Processes must be adjustable (sometimes by process participants), not perfect, in order to adjust to changing customer requirements.
  • Small incremental improvements must be harmonized with larger transformative change.

Gartner defines an explicit process as one that it visible and independent from its implementation; namely, the process has been modeled separate from context manual or automated context. This type of modeling and the management of the explicit processes is essential for effectiveness and innovation; it allows for the establishment of process KPIs and allows you to model potential changes to the process. These process models provide a view of work in progress; as these models are implemented in BPMS, they become the visual metaphor for the work for monitoring and management purposes. They also provide a method of communicating about the process, both between business team members as well as between business and IT.

This also leads to new management techniques. Management becomes more real-time as the process monitoring tools allow for view of what’s happening right now in the business process, instead of managing through the rear-view mirror via historical reports. Typically, a process-centric view encourages collaboration among team members, and also encourages participation by the process workers. Both business and IT workers have different roles: the business user may be assembling their own solutions, while the IT person is designing and building components to be assembled.

She looks at a number of key factors for determining when a BPMS might be used:

  • Strong focus on coordinating multiple resources to create successful work outcomes, including people, systems, information and policies.
  • The process crosses a large number of boundaries.
  • The process is poorly understood.
  • The process is customer-facing or partner-facing.
  • The process is more susceptible to external or internal disruption.
  • Business will be responsible for change management, not IT.

If these factors aren’t present, then a more traditional coding approach might be used.

Hill went through some of the process design patterns — I saw this at the previous summit and really liked it, since I use something quite similar with customers — in order to map process characteristics onto different styles of processes, and therefore onto a subset of the BPMS products that might best suit those needs. The three most common patterns that they see with BPMS are case management, form-driven workflow, and participant-driven workflow.

She finished up with the BPMS magic quadrant, and explained that there are so many vendors in the leaders quadrant because they’ve changed the definition of what’s included in BPMS; I see that as a reason why there’s more vendors in the magic quadrant overall, but not why it’s so heavily weighted to the upper-right quadrant. She believes that consolidation for the purposes of acquiring technology functionality has already mostly occurred. She also sees that the larger platform vendors such as Microsoft are focused on software development as the primary method for BPMS rather than model-driven approaches that limit the amount of code.

She believes that this is not the time (yet) to pick the enterprise-standard composition platform, because no one tool handles all of the six process styles that she showed earlier. This is still not a mature market, in spite of the purchasing activity going on.

2008 02 07 BPM Comments (1)

Gartner BPM: Weaving BPM into the Fiber of the Enterprise

Elise Olding moderated a panel on weaving BPM into the enterprise, with Eric Abecassis, Architecture and Integration Manager with Schlumberger, Jim Boots, Enterprise Architect at Chevron, and Kevin Morgan, Program Manager at Dolby.

Abecassis started with the process-related problems that they had at Schlumberger: processes had to be standardized in order to effectively manage growth and improve execution, reduce the administrative burden on the field people, and improve alignment between business and IT. Their approach was to focus on three main types of activities:

  • Doing the right things (business)
  • Understand the right things (business/IT)
  • Doing things right (IT)

It appears that their BPM projects are primarily driven by IT (although with heavy involvement by the business), in contrast to Chevron, where grassroots business actions drove the BPM efforts. In their case, a business unit had some amount of success, then a few individuals worked at selling the ideas across the company until it was accepted as a broader platform that can be used elsewhere. They’re still somewhat in stealth mode inside their own organization

At Chevron, they learned how to use the tool, then started to play around with how it could be used: looking for emergent applications of the technology. They showed off BPM to anyone who would listen, particularly trying to link it to existing initiatives, and continued to develop their BPM approach as it become popular in other areas. Overall, the grassroots efforts within the business delivered a proof of concept and a core set of advocates, but eventually key management endorsements and dedicated resources were required to make the transition to an enterprise-wide effort.

Dolby is a sort of 40-year-old startup that just went public two years ago, and is going through some major cultural changes to adapt to the changing world of entertainment technology. A management consulting firm provided them with recommendations for reorganization, then when they started to implement that internally, they discovered that this reorganization — a common issue — actually broke a lot of their business processes. He found an interesting effect: internal audit people have great insight into where problems might exist in business processes, and typically have the attention of management to a greater degree than a BPM team, so he worked closely with them.

It’s good to hear some success stories about how organizations are starting to become more process-centric: these stories aren’t just about how a specific implementation worked, but how the organization started to embrace the benefits that BPM could bring.

It’s a bit distracting that the panel members have obviously been told not to mention their BPM vendor by name; they dance around it by describing the tool, how they selected it and how they use it, but never say what it is.

2008 02 07 BPM Comments (0)

Gartner BPM: The New Agile BPM Method, David Norton

This morning, I attended with David Norton’s session on integrating BPM and Agile software development methods. In BPM, we always talk about how BPM brings agility to business processes, but what facilitates that agility? Although a lot of this talk is about Agile, it’s definitely valid to look at how to apply Agile methods to BPM projects, since there’s still some amount of software development in almost every BPM project.

He started with a review of software development methods: architected model-driven (including BPM, where you draw an executable process model rather than writing code to handle work routing), architected RAD, and Agile. He then drilled in on Gartner’s 10 principles of NeoRAD (an example of Agile), such as close involvement of the customer, peer review and an iterative approach.

BPM needs to be a mix of agility and discipline, but not a waterfall methodology that we so often see used by old-style development teams when they take on a BPM project; BPM is predominantly architected model-driven because of the executable process models, but also uses some aspects of architected RAD and Agile since there are integration and UI components that require development beyond just the process modeling stage.

He described the principles of Extreme Programming as a coding methodology, and Scrum as a way to manage agile development projects; Scrum, in particular, has a lot of useful concepts that could be applied to BPM projects. He also covered Dynamic Systems Development Method, a type of RAD framework that includes the concept of turning an operational prototype into the end product to reduce waste and time in the development cycle, and Lean Software Development, focused on reducing waste and defects in the same sort of way as Lean works in the manufacturing sector.

He then looked at how BPM release cycles — continuous cycle of design and optimization, iterations of under six weeks, new policies and rules in a day — and how they are much more aligned with Agile methodologies than the traditional waterfall approach, which typically sees the first release in 4-6 months (in the best possible case). Unfortunately, most development teams inside organizations are still stuck in waterfall methodologies, and third-party professional services firms are more motivated to suggest long development cycles with large development teams. That means that even though the process model might be done as zero-code architected model-driven, the (often excessive) customization that happens in the component/service layer and the user interface drags down the project schedule.

This presentation was really much more about Agile than BPM — sometimes Gartner makes a bit of a stretch when bringing in their analysts from other areas and trying to make them BPM-ish — but if you’re not already looking at Agile development for any BPM-related project, you definitely should be.

2008 02 07 Software design Comments (1)

Gartner BPM: Geary Rummler closing keynote

Today’s sessions closed with a presentation by Dr. Geary Rummler of the Performance Design Lab on the nature of process and the value of shifting an organization to process centricity. I saw him speak at the 2006 Proforma user conference, and enjoyed it; how can you not like listening to the guy who invented swimlanes?

He started with a historical perspective on process, starting in the 1982-92 timeframe with his highly-successful process-related work at Motorola that resulted a lot of useful process management/improvement tools, followed by the somewhat disastrous 1992-97 re-engineering phase that resulted in the split between business management and process management. When re-engineering became a prominent feature in Dilbert cartoons, Rummler decided to retire.

It didn’t take, and four years later (in 2001), he came out of retirement to find a confusing landscape of acronyms, an unnatural focus on technology, low-level process improvement techniques masquerading as methodologies, and subprocesses being implemented in silos. A majority of process activities was in the weeds, and had little linkage to business results. All of this brought him to today, where he asks the questions “why are we doing this ‘process’ stuff anyway?”

He moved on to a business perspective on process, where we’ve perverted the order of things such that budgets are allocated along the lines of the organizational chart, and therefore the work systems — including applications, data and networks — to which those resources are applied end up (naturally) siloed. Making improvements within a silo, as we all know, can only have limited impact on end-to-end process improvement and particularly in the interfaces to customers. The work system becomes invisible, and it’s managed only indirectly through management of resources: reorganizations and down-sizing as action items instead of considering how the underlying work systems themselves need fixing.

What we need to do is change our focus on work and resources, and focus on the business as a system for creating value, manifested in the products and services delivered to the customers. The value creation system — effectively, the customer-facing business processes — and the resources must both be managed directly and in concert. BPM, therefore, isn’t just about modeling, improvement and management, it’s about creating the value creation dimension of the business.

He then looked at a future perspective, with the Performance Design Labs’ framework for value creation, which provides a model of a business, its customers and external impacts. Inside the business in the first level of the model, we see the value creation system, enabling processes and management systems; driving down to the second level shows the three primary process systems in any value creation system (product/service launched, sold, deliverer); then the third level of detail shows the high-level business processing systems; the fourth level is the processes and subprocesses; and the fifth level is the tasks and subtasks that actually connect to the (human or system) performers of the tasks. This five-level hierarchy maps to a set of business architectures: supersystem maps, cross-functional maps, business process architecture, then down to the process and task maps, all of which become a management-friendly schematic of the business.

Within the hierarchy, the first three levels represent the strategic application of process work, and the lower parts of the third level through all of levels four and five represent the tactical side. Unfortunately, much of BPM is focused on levels four and five, which is disconnected from the value that’s outlined in the first level and from business leadership.

The implication of all this is that businesses need to be managed on two dimensions: the functional silos (buckets of resources), and the business processes that cut orthogonally across them (the value creation). And, just as there are problems in things disappearing into the vertical white spaces between functional silos, they can also get lost in the horizontal white space between business processes.

BPM must drive the articulation of the value dimension, thereby making it possible to link from level one down through to level four of the value creation hierarchy.

Rummler is a delightfully funny and informative speaker, and I enjoyed this even more than the last time that I saw him speak.

2008 02 06 BPM Comments (3)

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.

2008 02 06 BPM
SaaS Comments (0)

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:

  1. 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.
  2. Understand the business process
  3. Secure business buy-in
  4. Be prepared to model early in the lifecycle, and modify the models iteratively throughout the project.
  5. 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.

2008 02 06 BPM Comments (0)

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:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
2008 02 06 BPM Comments (2)

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).

2008 02 06 BPM Comments (4)

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 BRM, instead of BRE.

2008 02 06 BRM Comments (2)

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:

  1. 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.
  2. Convergence of business processes, people and information: applications that provide business value will consider all of these.
  3. Focus on performance management evolution from reporting and monitoring to predictive planning and closed-loop optimization.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. 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.

2008 02 06 Comments (0)

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?

2008 02 05 Comments (0)

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.

2008 02 05 BPM Comments (1)

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.

2008 02 05 BPM Comments (2)

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:

Presentation agenda as a mind map

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

2008 02 05 BPM Comments (1)

Gartner BPM: Why and How Allianz Uses BPM, Tim Rolfing

The second half of Lomardi’s vendor session is a presentation by Tim Rolfing, IT Director of Allianz of America Shared Services on how they use (Lombardi’s) BPM. Allianz Life is a 3000-person life insurance organization that’s part of the huge Allianz group of companies.

Their initial drivers for BPM date from 2005:

  • The ability to scale efficiently, based on projected increases in premiums and employees.
  • Leveraging common processes, since they had a number of duplicate functions due in part to their growth through acquisitions. They also had 500-700 systems that were in use throughout their organization that needed to be rationalized.
  • Need for transparency into operations, both to have a view of the end-to-end processes in order to look for areas of process improvement, and for real-time operational process monitoring.
  • Employee job enrichment, by automating some of the routine tasks done by people, thereby allowing people to focus on customer-centric activities. This also allowed the human-facing tasks to be done anywhere in the world, certainly a bonus for a company that’s part of a global organization.

They’ve implemented an impressive number of processes in a short time:

  • Securities application processing
  • Money processing for applying premiums
  • Life insurance underwriting
  • Survey response tracking
  • New (insurance) product implementation, which improved the cycle time to implement a new product from over 50 days to 12 days, and removes IT from the critical path
  • Application document search, sort and prioritization within specialty queues to allow SLAs for specific applications to be met; failure to meet the SLAs can result in financial penalities
  • Service recovery and customer complaint handling, including some historical analytics to determine if these have detectable patterns, such as product or broker

They have a number of other ones lined up for implementation in 2008

He ended with some lessons for success:

  • Look for small processes with significant impact
  • Plan for a deployment time frame of no more than 60-90 days
  • Keep the first pilot project simple
  • Follow an iterative methodology rather than trying to boil the ocean in the first version

They keep the BPM project teams small, and have found a great deal of improved efficiency through their implementations. They have a BPM center of excellence that they use to train the business side. The technical teams have done the Lombardi technical training, and found that the week-long training was adequate for their needs. He wouldn’t talk openly about their vendor selection process, but stated that there were significant differences between BPM products. The business owns the process and maps it down to a specific level of detail (in Blueprint, I believe) before turning it over to IT who “move it over to the BPM tool” — presumably, they’re using Blueprint for modeling by the business, which still requires export/import to get to Lombardi’s TeamWorks execution environment, so round-tripping would definitely be impacted.

As an aside, I really wish that Gartner did a better job of publishing presentation on their website, since there’s material from this (and other) presentations that I’d like to review in the future. They don’t seem to publish any of the presentations from the vendor sessions, even those by customers, and half of the regular session presentations are also missing from the site (and presumably the CD in our conference pack) as of today.

2008 02 05 BPM Comments (0)

Gartner BPM: 3 Milestones of BPM Success, Toby Cappello, Lombardi

Although Gartner really only invites their own analysts and customers to speak in the conference sessions, sponsoring vendors can buy a spot in the vendor session tracks, which breaks down into two 30-minutes sessions: usually one by the vendor themselves, and one by one of their customers. I’m sitting in on Lombardi’s double session, the first part of which is with Toby Cappello, Lombardi’s VP of Professional Services; this will be followed by a session with Allianz that I’ll also stick around for.

Cappello is focused on the cycle of define, deliver and improve, with three components:

  • Setting direction (motivation, organization)
  • Directing work (process, rules)
  • Improving performance (analytics)

He walked through typical parts of each of the define, deliver and improve milestones; nothing earth-shattering here, but he’s really stressing the need for agility in this cycle.

He’s a big fan of hands-on involvement by the business in BPM projects, and feels that business and IT aren’t really collaborating if they’re not sharing the process models. Luckily, that’s something that Lombardi’s products allow you to do reasonably well, and will improve further with their expected mid-year product release that will combine the process model repositories for their software-as-a-service product discovery tool, Blueprint, and their core BPM environment, TeamWorks. There’s delineation of responsibilities between business and IT — basically along the line between processes and services — but they need to be working together on the same model for true collaboration.

2008 02 05 BPM Comments (1)

Gartner BPM: Getting Started with BPM - Elise Olding

I saw Elise Olding speak at the September conference together with Bill Rosser, and I wasn’t completely impressed, but I think that she was fairly new to Gartner so wanted to take a second look. She’s focusing on three issues in this presentation:

  • How should users assess organizational readiness?
  • How should you initiate BPM and what does a plan for getting started look like?
  • What are the critical success factors to long-term success with BPM?

She breezed pretty quickly past the business process maturity model — again, I thought that Gartner would be focusing more on this — but covered some great points on the importance of corporate culture and change management when implementing BPM: exactly the things that many companies ignore, especially if BPM is being pushed by IT rather than pulled by the business. She makes the point that many factors required for BPM success don’t come naturally to many organizations, and discussed three enterprise personality profiles that determine the approach and goals:

  • Aggressives have an imperative to stay ahead of the pack; they’re trying to seize advantage.
  • Moderates have an imperative to get leverage over their direct competitors; they’re seeking parity in the marketplace.
  • Conservatives have an imperative to catch up with the bulk of the competitive pack; they’re trying to reduce pain and (although she didn’t state this explicitly) probably just stay alive.

She went through the different project roles and the skills associated with those roles: executive sponsor, business process improvement director, business process improvement project lead, design team, subject matter experts, and business process analyst. She drilled in specifically on the executive sponsor role and how important it is to have the right fit: an involved decision-maker with the right motivation and influence across the enterprise.

Next up were the steps for initiating a BPM  project: determining objectives (e.g., agility, compliance), understanding and defining critical processes (e.g., delivering products and services), determining the initial organizational model (e.g., reporting structure for process-specific functions), implementing a “getting started” checklist (14 key project activities that she identifies, e.g., develop business case), and documenting and using the BPM plan (actually just normal project plan/management). She spent quite a bit of time on these five points, and provided a lot of valuable detail and examples; this isn’t rocket science, but it’s good planning strategy that doesn’t add a lot of overhead.

She stressed some key points that apply to any type of IT project, not just BPM:

  • Focus on the right methodology first before selecting even the technology class, much less a particular vendor or tool
  • Projects must be compelling and tied to business strategy, and be prepared to go back at the end and see if the promised benefits were actually achieved
  • Pick the first project carefully: a success here will pave the way for later projects
  • Assign the right resources at the right time, including maintaining continuity of key resources throughout the project
  • Establish governance, but start out with a light touch and add more rigor later

As I mentioned in my review of her previous presentation, her background seems to be focused on strategic IT planning, so that many of her comments are applicable to other technologies, but she’s done a good job of moving from a generic IT strategy to a mostly BPM-focused strategy. She’s really talking about business architecture in this presentation, where BPM is just one of the methodologies and tools that might be used as part of business architecture — she stated explicitly that enterprise architecture is the context for BPM, a view that I’ve been discussing with my clients for some time. Unfortunately, many EA efforts are really more information architecture groups within IT, and they mostly ignore business architecture and other “soft” parts of the architecture.

There was a question about how to reconcile business analysts in both business and IT reporting areas; unfortunately, I think that she misunderstood this as how to reconcile business analysts in business and system analysts in IT, which is a communication issue rather than an organizational issue. I often see the business analyst title used for people in both IT and business, and my feeling is that business analysts belong in the business, although business process analysts should have at least dotted-line reporting to a BPM center of excellence if one exists. I’d love to hear any comments from readers on what they’ve experienced here with where business (process) analysts report and what works best.

Another question was about the role of the executive sponsor, and she had some good comments on how to manage your executive sponsor: establish a service level agreement with them, where they agree to four hours each week of effort, and agree to a specific timeline for responding to requests for decisions. A recommendation of hers, which would be difficult for a lot of people, is to document in the project reports if the executive sponsor is not meeting their obligations.

2008 02 05 BPM
EA Comments (2)

More live blogging from Gartner

I’m not the only one blogging from the Gartner BPM summit: I ran into David Straus of Corticon at the first break, and he said that he was blogging as well. You can check out his comments on Janelle Hill’s keynote here, which offers a very different perspective, since he addresses how she didn’t cover operational decisioning at a critical component of business processes.

2008 02 05 Comments (0)

Gartner BPM opening keynote: Janelle Hill

I’m here in Vegas for the Gartner’s 5th BPM summit, and I have absolutely no complaints about the wifi. :) They’re reporting about 1000 attendees here (I’m not sure if that includes Gartner and vendors), and I’m sure that those of us who attend these religiously are hoping that this is not a complete replay of the September show in Orlando.

After a brief introduction by Michele Cantera, Janelle Hill gave us Gartner’s big picture view of BPM, which will be covered in detail in other sessions throughout the conference.  Hill seems to be hitting her stride as Gartner’s face of BPM since Jim Sinur left almost a year ago. She started with the now-familiar view of process improvement over the ages, from Deming and Taylorism through TQM, BPR, Six Sigma and a variety of other methodologies and tools since the 1920’s. This has changed from a focus on scientific management, to computerized process flow, to package applications as best practice, to flexible and adaptive process.

Her view of how BPM might change with any coming recession is the same as most that I’ve heard (and agree with): BPM is likely to increase, not decrease, in tough economic times since it helps organizations to run their businesses more effectively and efficiently.

This talk is definitely a rework of her keynote from the last show (even the last two shows); check that out in case I miss anything. As she did then, she focuses on how BPM — both the management discipline and the technology — can support and encourage innovation within an organization. There is a focus on people within the processes, and how to enhance people’s efforts within a process, not just look for ways to automate the human activities: what Gartner is referring to as “the process of me” (seriously). This is key to innovation in business processes; although she doesn’t use the term “emergent applications”, that’s really what she’s talking about: providing process participants with the experience and tools that allows them to express some creativity about how to get the job done better.

She also discussed the impact of compliance and regulations on processes, requiring greater agility and greater visibility, particularly when dealing with regulatory bodies in multiple countries.

We saw a familiar chart showing how although productivity and efficiency is typically the greatest perceived value of BPM today, that will shift to visibility being the most important benefit by 2012, and innovation being the most important benefit by 2017. That doesn’t mean that productivity and efficiency become less useful, but a baseline expectation will be established for these benefits and they will no longer become the most important thing that organizations get from their process management.

Hill changed tack to talk about why BPM technology matters, and the decoupling of process models from the underlying technology into a model-driven architecture. These explicit process models allow business professionals (usually a trained business analyst, but still someone on the business side) to make changes to the process, providing improved immediacy in linking needs to the executing processes, and providing better visibility into the process to see if the changes to the process are actually improving it. This is the driver for a complete paradigm shift, where the business team now owns the process modelling part of the implementation, and IT adds to those models to provide the necessary technical linkages but doesn’t redo the processes in some other tool: the process that the business modelled is what actually runs. By establishing KPIs on the processes, further process improvements can be tracked against those KPIs, and services can be developed to help meet those KPIs within the process context.

Driving to a model-driven architecture means that processes have to be pulled out of the packaged enterprise applications, where processes have been implicit within the applications themselves. The packaged application vendors are starting to expose their functionality as services, and some are even rolling their own BPM as well as allowing other BPM suites to call their services as part of a larger process orchestration. These enterprise vendors, plus the middleware vendors and the BPM pure plays, are all fighting for turf in the current BPMS space.

BPM involves more than just technology: it takes leaders with vision, disciplined culture, BPM expertise and standards as well as the tools. She focused on how technology leaders (e.g., CIOs) need to contribute to the BPM vision and efforts in order to make it strategic, but I also feel that the business leaders need to make the same level of contribution: bringing the B back into BPM.

Gartner has some standard material that they’ve been using for a year or more on what it means to move from a functionally-driven organization to a process-centric one: align roles and responsibilities to the business processes, not by the functional area; business leaders have end-to-end visibility of the business processes; business rules and processes are changed by the business; and there’s more explicit views of handoffs within the process and other points contributing to process optimization. One key point made here is that cost accounting needs to move from being aligned with the functional area to being aligned with the process steps — I’ve seen first-hand how not doing this can cause tremendous problems within an organization attempting to implement enterprise-wide processes.

There are a number of organization issues when dealing with BPM, not just the technology part. In addition to business leadership from a high level, there will need to be process ownership and support from mid-level management, and explicit change management. As mentioned previously, individual process participants also need to be encouraged to look for ways to improve the process, much like the Lean tenet that allows anyone to stop a broken process and offer an improvement.

Hill talked about the type of people that you need for a process-centric organization: people who “think process”. However, I think that we need to have a greater focus on how to take current teams and imbue them with that process orientation.

She also discussed management actions such as creating a governance framework and BPM competency center, appointing specific business process analysts focused on end-to-end processes rather than by functional area, and creating a real-time management culture that is focused more on a view of what is happening in their operations right now rather than through the rear view mirror of historical reporting. There are some specific actions for IT management as well, starting with recognizing that IT should be enabling BPM, not leading it. There’s a lot of groundwork that can be done even if the business is just starting (or hasn’t yet started) BPM initiatives, such as SOA and service definitions.

Her wrapup was on the value of BPM, looking at specifics of cost/efficiency, time/adaptability, risk/compliance and revenue/innovation — a lot of great points here on where the benefits can be expected.

She also mentioned a good fundamental principle for process improvement that came from a customer during a session that she held yesterday: when considering a process change, be driven by how that change will impact the end customer. Excellent words to live by.

2008 02 05 BPM Comments (2)