With the promise of big profits in the business process management (BPM) market, vendors from all over the technology map--pure-play BPM, as well as enterprise application integration (EAI), enterprise resource planning (ERP), content management suites and so on--are developing or modifying their product portfolios so they can offer BPM. They want to sell it into their installed base or build new business by solving a stubborn problem--linking processes inside enterprise and other applications with a master process management infrastructure that integrates with separate applications in multiple departments and organizations.
While BPM is a complex and integration-intensive technology, many pure-play BPM application service providers (ASPs) have appeared over the last several years. Indeed, according to Nathaniel Palmer, founder of Transformation+Innovation, the viability and proliferation of hosted BPM is one of the leading near-future BPM trends.
It's likely, though, that more than the traditional hosted application business model will evolve. Many vendors offer hosted BPM as a service located in the ASP's data center, which customers access through a browser at the customer site. They then use it to build and link business processes across their organization. There are variations within that basic model--sometimes, for instance, instead of in-house IT staff, the ASP's technical experts will model processes explained to them by the customer's business experts.
Alternatively, says Palmer, ASPs will sometimes host simpler, specific business services like a credit check process that they developed with their BPM application and then spin out as a discrete offering. Because most hosted BPM is offered on a service-oriented architecture (SOA) platform, says Bill Chambers, principal consultant for BPM at Doculabs, customers will adopt it as a composite app in processes they're building with their legacy installed BPM system or as template-like processes that they can easily incorporate into procedures they build with the hosted BPM app. Most of those, says Palmer, will be research-oriented--they'll retrieve information needed for the progress of the larger process--though some may be complete processes in themselves that perform standard functions, like payroll, in organizations. Those types of ASPs are becoming known as business service providers (BSPs) because, just as with hosted BPM, the customer "is buying expertise and business logic that [he or she doesn't] otherwise have … and substitutes business rules for human actions that are not core competencies for the customer," Palmer explains. Customers can focus instead on their business and use BPM to link all those outsourced point processes together to address their non-core process issues.
Which model to use?
Whether customers will use installed or hosted, or both installed and hosted types of BPM depends on several factors, says Chambers. Hosted solutions are not evolved enough to build and manage very complex, mission-critical processes that require extensive integration with multiple applications. At this point, he says, there are few BPM deployments that can. BPM, therefore, is still immature, and customization and integration are too extensive and expensive for many organizations to attempt enterprisewide installs.
So, practically speaking, most organizations will use installed systems to manage their complex, mission-critical, proprietary processes (which essentially define the value of their business). And they will use hosted ones to manage more generic, non-core, less complex administrative processes (which enable their business). They can be easily scaled up or down as business growth dictates. Ideally, customers can use both installed and hosted systems simultaneously to complement one another--the first for robustness for a higher cost, the second for flexibility at a lower cost. As the various components of BPM become better integrated and more out-of-the-box, Chambers says, hosted and installed systems will begin to really compete with one another with more comparable functionality, cost and ease of use. But, he adds, that's a long way off.
Improvements to installed and hosted systems, like APIs to ERP and other applications that BPM commonly integrates with, as well as templates for vertical market processes, are needed first to simplify and expedite integration. But even as that is accomplished, says Chambers, hosted systems will have to incorporate business activity monitoring (BAM) to achieve the Holy Grail of BPM, which is B2B multi-app integration with real-time monitoring for fast, flexible and continuous improvement of processes throughout a supply chain.
Chambers adds that they'll also need to offer easy integration with business intelligence (BI) packages so real-time data is ported into them and executives can analyze it in data warehouses via dashboards to make strategic changes to the supply chain as needed. Politics will also delay enterprise BPM adoption. Department heads in all the organizations involved will have to come to consensus on whether they'll be involved in an automated process managed by an anchor company or in ongoing process changes via BAM continuous improvement, according to Chambers.
That being the case, a few instances of success serve as models. For instance, Chambers admires Lombardi Software's global enterprise BPM install at Dell. Here are a few representative BPM ASPs.
Nsite offers hosted BPM that is automated and semi-automated. The first uses a technique called "predictive routing," which invests the system with enough intelligence to know where to automatically route an item based on how similar items were routed in the past. Once that route becomes fairly standard, users can lock it in with a design tool called Process Builder, which builds rules on the fly via point-and-click commands, not coding.
To aid performance, Nsite uses AJAX (Asynchronous Java Script and XML) to beef up the browser so it's more like a thick client. According to Rosie Hauser, VP of marketing, "You don't have to render HTML pages or go back and forth to the server, so pages come up fast." Because the development environment is essentially in the browser, you don't need to download components like Active X controls or Java plug-ins either.