No one knows exactly when or where the term Business Process Management (BPM) first appeared, but the industry consensus is that it evolved from, and converged with, business process reengineering and a set of process improvement best practices and technologies such as process automation, workflow, ERP, and business intelligence. BPM makes perfect sense as a management strategy. BPM technology, which gets most of the current limelight, does not. It is neither for the faint of heart nor the frugal. It is risky, it is expensive, and it is fraught with peril for executives and companies alike.
A survey by BPM Magazine found that vendors and consultants fall short of the promise of BPM systems: only 41% of the companies surveyed reported their implementation went according to plan. Projects take longer than expected to finish, and once systems are running, companies are still wrestling with ease-of-use and integration issues.
BPM technology is big business, and there is real pressure to get started and not “lose out” on the chance to be more competitive with “state of the art” technology. In recent years the worldwide BPM technology market has been estimated in the tens of billions of dollars, growing by double digits, and was projected to keep climbing rapidly. The total BPM technology market, including consulting services, was predicted to pass well over a hundred billion dollars over the following decade.
Before a company invests hundreds of thousands or millions of dollars in BPM technology, executives should know about some dangerous landmines, and one major blunder to avoid: ignoring that substantial operational performance gains are possible as a precursor to, or in place of, implementing BPM technology.
1. Believing that BPM is a technology breakthrough
First, BPM is not a technology, and it is not a breakthrough. Yet the message that BPM is technology-centric is a common view among its boosters. In their book “Business Process Management: The Third Wave,” Howard Smith and Peter Fingar present BPM as a strategic focus on processes driven by interconnected technologies. Their subtitle, “Don’t bridge the business-IT divide: Obliterate it,” states their definition of BPM as technology-enabled management loud and clear.
One reviewer writes: “This book provides the first authoritative analysis of how Business Process Management (BPM) changes everything in business and what it portends. In this book, Smith and internationally acclaimed co-author, Peter Fingar, herald a breakthrough in process thinking and technologies that utterly transforms today’s information systems and reduces the lag between management intent and execution.”
Caution is the right word here. We have heard “technology will save the world” messages before. Aligning technology with business processes is not a breakthrough in thinking. Sound alignment strategies and heavily promoted technology products for process improvement have been around for two decades. Dust off the old white papers on CASE (computer-aided software engineering), workflow technologies, artificial intelligence, fourth-generation languages, end-user computing, or BPR, swap in BPM as the buzzword, and the marketing message reads almost identically.
As consultant Jim Campbell of Partners for Change writes in “Looking beyond the BPM Hype,” “BPM isn’t new, but is a culmination and evolution of existing best practices and technology that have now been repackaged.” BPM is not revolutionary. It is far more than technology, and executives should treat it as a business management strategy, not a technology-enabled breakthrough and cure-all.
2. Forgetting that IT projects are historically risky
Executives should keep past IT projects and failures in mind when weighing BPM technology investments. Companies have walked the technology promised-land path before, sometimes with disappointing results. Large-scale IT projects are hard, complex, and risky. Many run late, and the business benefits are often questionable. The Standish Group has surveyed IT projects since 1994 and consistently underscores the dangers of large technology projects.
In a landmark study, the Standish Group reported that 23% of projects were canceled before completion and that 52% of projects cost 189% of their original estimates. Only 28% were completed on time and on budget, and even those delivered just 49% of the originally proposed functionality in large companies, and 74% of the original specifications in small-company projects. On implementation, 64% of the requested features were rarely used.
There is no reason to expect BPM technology projects to be different. Dr. Raj Ramesh notes: “Research has shown that even amongst IT projects only 28% of them finish on time. On BPM projects, the failure rate is even higher due to the immaturity of the technology and scope of the implementation. If you are implementing a BPM project with the current tools and using the current standards that are still in flux, you are on the bleeding edge of technology. So your failure rate is even higher.”
The human factor raises the risk too. As Computerweekly writer Antony Savvas observes, it “is often the biggest barrier to companies adopting successful business process management strategies.” He notes that Forrester Group says too many organizations believe they can implement BPM with “nothing more than a comprehensive set of tools and a good return on investment story,” and warns that failing to address cultural resistance and “organizational desire” can sink even the best-intentioned BPM projects.
Organizations that have struggled with CRM, ERP, or other enterprise-wide rollouts will find BPM just as daunting. If past projects ran over budget, arrived late, or delivered weak results, executives would do well to challenge IT to prove exactly why and how a BPM technology project will land on time, on budget, and on value. Early adopters, beware.
3. Being an unwitting early adopter
Choosing a BPM technology solution is a far-reaching decision that will permanently shape the business, and a poor or premature selection could be disastrous. Complete BPM suites are still in their early releases, in a crowded field of over 2,000 vendors pushing new and re-branded products. Some vendors claim 20-plus years of BPM success, while some analysts say the products have existed for only ten to twelve years. A Meta Group analyst put it plainly: BPM is nothing new, simply an evolution of workflow. The analysts and vendors are still writing their own versions of the BPM story, and the products are largely unproven and early in their integration.
For example, one industry analyst (a firm later purchased by Gartner) advised that “Global 2000 (G2000) organizations are increasingly wrestling with the question of whether business process management (BPM) technology is an end-user tool owned by the business to facilitate process automation or whether it is an orchestration engine / platform deployed by the IT organization (ITO) to enhance transformation to Web services and service-oriented architecture (SOA).”
After filtering through the jargon, it becomes somewhat clear that there is still confusion over what BPM technology is and is not. Other analysts offer similar language-laden descriptions, each with its own different opinion, and the vendors vary even more widely. If there is no agreement on the basic definition of BPM technology, there is little reason to believe maturity is in sight.
That immaturity is compounded by the nature of packaged software. As Bob Jandro, CEO and President of Nsite, advises, “The problem with BPM software in today’s world, however, is the problem with packaged software in general: high upfront license fees; protracted, expensive implementations; ROI promises that can take years to fulfill; and difficulty responding to change on an ongoing basis.”
4. Thinking that industry analysts are objective
Executives must remember that Analyst Bias Syndrome is rampant in the technology space. It is hard to tell fact from promotion, vested interests abound, and objective analysis is scarce. Gartner Group positions BPM vendors by breadth of function and ability to deliver and ranks them in its Magic Quadrant to help clients make technology decisions.
The catch is that the technology vendors themselves are Gartner clients, so there are obvious biases toward promoting advanced technology solutions. Forrester Research ranks the BPM Top 10 on design, automation, and human workflow, and likewise sells reports and research to both business clients and vendors.
Executives should weigh carefully that the analysts are clients of, and paid by, the vendors, which heavily influences their recommendations to expand the use of specific technologies, including BPM. Whatever the claims of objectivity, these analysts are driven by revenue and profit and are therefore motivated to push technology adoption. The large consulting firms have sizeable technology integration divisions and welcome the trend toward monolithic, multi-year, multi-million-dollar projects that lift their consulting revenue. Executives should guard against the hype and avoid handing BPM technology decisions to analysts and consultants. Instead, lean on your CIO to sort through the hype for solutions that are pragmatic and tied to achievable business goals.
5. Watch your wallet
Given the price tag, BPM could just as easily stand for “Big Piles of Money.” Executives should check and recheck the business case and insist on direct conversations with executives at other companies where the proposed solution is already running.
At the same time, the vendor will not be able to hand over a long list of references for the exact technology being proposed. Any reference clients running the solution today implemented a previous release, often a completely different BPM suite, and their business requirements never match yours, because every company is unique.
The BPM market is driven by more fiction than fact, and, as noted, there are huge profits at stake. Hoping to cash in on a multi-billion-dollar opportunity, vendors spend millions on advertising, white papers, and events. Event organizers promote executive BPM conferences and seminars. Dozens of BPM organizations compete for membership and for recognition of their standards. Consulting firms have dusted off their BPR presentations, merged them with workflow terms, upgraded the terminology, and now offer executive briefings, seminars, and training on how to succeed with BPM. That is a great deal of spending pressure to resist, and a plethora of products and approaches to choose from. Executive caution is the order of the day. These projects are expensive, the ROI is anything but guaranteed, and budgets are very unlikely to hold.
Warning from a BPM technology vendor
Even the vendors caution against the unmet promises and dangers of BPM technology projects. A recognized leader in the BPM market highlights the risk: “Companies <like yours> have invested millions of dollars in applications over the years, all in attempts to improve functions such as enterprise resource planning (ERP), customer relationship management (CRM) and supply chain management (SCM.) If you’re among them, you know all about the promises of transformed operations and incredible benefits. Unfortunately, you probably also know how quickly that vision can fade when implementations take more time and money than expected, and as you realize that the new systems can’t adapt to requirements that change during implementation, let alone after deployment.”
The same vendor continues: “So what about another more recent player on the scene: business process management (BPM)? BPM promises to help you orchestrate all of your people and systems across departments and platforms so you can more quickly, consistently and efficiently conduct processes and transactions. Whether you’re talking about processing and fulfilling an order, responding to a customer inquiry or provisioning a service, the promise of BPM is that it will improve the way you get things done. That’s a tall order, can BPM deliver?”
The question is a valid one. Does BPM technology make business sense for an organization, and will it deliver a return that justifies the risk, distraction, cost, and effort? Before going beyond the sales pitch to a purchase, there are important questions to answer. The answers will reveal whether the BPM technology path is valid, needs adjustment, or whether a non-technology path to process and performance improvement makes more sense.
Avoiding a major BPM technology blunder: confirming organizational readiness
As stated earlier, Business Process Management is a business management strategy and should be profit-focused, not technology-driven. Otherwise the business risks becoming a slave to technology rather than using technology as an enabler of greater business value.
BPM, the strategy and not the technology, requires a clear view of the business goals for improvement, followed by an understanding of the processes as the critical next step. You cannot manage what you do not understand, and many organizations have not even identified their processes, let alone built a shared understanding of them. Without that shared, agreed-upon view of the existing processes, BPM technology will not help executives manage their processes effectively or profitably.
BPM technology readiness questions
To avoid a BPM technology blunder, a company should first decide whether it is even ready. Executives should confirm that BPM makes sense as a management strategy, that it is understood, and that the basic foundation is in place. Key questions:
- Is there a common understanding of BPM and its role in the business?
- Is there a Business Process Management strategy in place?
- Have process owners been assigned for the major transactions of the organization?
- Is there a clear organizational understanding of business processes?
- Have processes been mapped at a high level, and are those models current?
If the answer to any of these is no, selecting a BPM technology should drop in priority until Business Process Management is clearly understood and the existing processes are mapped and documented.
If a BPM strategy with performance goals and named process owners already exists, executives should then ask:
- Have process improvement techniques been used in the problem areas of the business, through quality teams, lean initiatives, or other methods?
- Are process improvement teams currently in place?
- Are there internal people with skills in process mapping, analysis, and redesign?
- If so, have all of the possible no-cost solutions been implemented to capture immediate operational benefits?
- Is there a prioritized list of the remaining improvement projects?
If any of those are no, selecting BPM technology is likely premature, and there are thousands, even millions, of dollars on the table in the form of short-term untapped savings and improvement opportunities.
Even if the BPM strategy is sound and the processes are already streamlined and optimized, the IT project risks remain. Two more questions:
- Have previous enterprise technology solutions been delivered on time, within budget, and with the promised business benefits?
- Is the potential return large enough to justify risking hundreds of thousands of dollars and several person-years of effort on an unproven technology solution?
Unless the answers are a resounding yes, the organization may not be ready for BPM technology and may want to weigh an alternative investment of time and money.
Alternative to BPM technology: business process breakthroughs
BPM technology will not produce process improvement by default, whatever the vendors and analysts say. The likely result is the automation of poor, inefficient processes, an expensive “paving of the cow paths” that simply digitizes existing problems and leaves the bottlenecks, broken business rules, and tangled information flows intact.
Regardless of readiness, executives are well served to remember that dramatic process improvements are usually possible once management recognizes the power of BPM as a management strategy. Most organizations can get breakthrough results through rapid process improvement projects. Business process breakthroughs come from modeling, analyzing, and simulating process flows and using current resources to solve critical problems, without large capital investments in technology projects.
The ideas Michael Hammer raised in his 1990 Harvard Business Review article “Don’t Automate: Obliterate” still ring true. That article was a catalyst for business process reengineering (BPR) and radical improvement through the 1990s, with a clear message: organizations can uncover and implement dozens, if not hundreds, of ideas for improving their business processes, and many of them require no capital investment and no technology. These concepts of BPR are as valid today as they were decades ago.
Roger Burlton of Process Renewal Group is a thought leader on BPM, and his book “Business Process Management: Profiting from Process” is a primer on process-centric improvement and a must-read for anyone who wants to understand BPM as a business opportunity rather than a technology play. Burlton presents BPM as an approach to enhancing the bottom line, with technology as an optional tool, and lays out an excellent step-by-step guide to understanding and renewing processes while honoring proven project management, analysis, and change management principles.
In “Breakthrough Business Results with MVT,” Charles Holland suggests three simple criteria for judging a process improvement idea:
- Practicality. The proposed process must be possible with no more effort than is currently expended.
- Speed of implementation. The solution must be testable and implementable within days or weeks.
- Cost free. Implementation must be possible without raising costs, with no capital expenditures and no increased operating expenses.
BPM technology projects fail all three of these tests and do not, by default, produce process improvements.
Executives: stop and consider the possibilities
Business Process Management should be a profit enhancer that delivers operational performance gains first and foremost. Because an organization should treat BPM as a way to manage the business and its processes toward business objectives, BPM technology should not be selected until a Business Process Management program is defined, including a process management strategy, a supporting organization, and a framework of the information and product flows.
Without a BPM strategy, and without having improved processes to a reasonably high level of efficiency, BPM technology will not deliver rapid value or an optimal ROI.
Prudent executives recognize that starting with pragmatic, rapid, inexpensive improvements can produce breakthrough results, with sharply reduced cycle times, better product quality, and dramatically lower costs in only a few weeks, using current resources. That makes sense whatever the organization’s BPM technology status.
Fact: organizations can save millions by identifying and implementing operational improvements to the fullest before investing in BPM systems. The money they save can then go toward BPM technology, if it is still necessary. To see where those savings tend to hide, read about the value stream mapping trap or explore plans and pricing.
