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What does business process management mean for the IT industry?

We will be hearing a lot about business process management this year from the software and service community. Many books on BPM from the management consultants (including business process re-engineering veterans Michael Hammer and James Champy) are due for publication later this year. The application server, workflow and EAI vendor communities each believe it is the next market opportunity for their products. Meanwhile, some high-profile small technology companies, such as Intalio and Excelon, are hyping up the area.

By Katy Ring

Why is business process management (BPM) hot? Whatever your organizational structure, be it in manufacturing, services or retail, your operation is underpinned by processes--the fundamental ways of doing things that are either efficient and appropriate, or, more often, outdated and arthritic. There are, of course, profound cultural reasons why organizations find it hard to kill redundant processes or even to rejuvenate them. But there are also IT reasons why process change is hard. The logic of business process tends to get hard-wired into highly expensive IT systems, which are complex and act as a brake to change. The great twenty-first century irony is that the more we automate business, the harder it seems to be to react quickly to operational change.

The "Holy Grail" of IT is to find a way to enable organizations to quickly build flexible, responsive systems that are able to exploit an underlying and existing software infrastructure. BPM is the latest in a long line of IT trends, which claims to offer that capability and free the organization from the chains of its own IT and process history. What is BPM?

BPM is a system implementation methodology to aid the identification, comprehension and management of business processes that interact with people and systems, both within and across organizations. It is based on the following assumptions:

  • business processes are ongoing, ever-changing and developing;;

  • where one process ends, another starts; and ;

  • that there is an understanding of, and catering for, process flow between multiple organizations and interested parties.;

BPM is based on a technology solution, a business process management system (BPMS) that can be used to manage people-to-people, machine-to-machine, machine-to-people and people-to-machine interactions.

What BPM is not

BPM is not a product category. Hence none of the following should be presented as a BPM solution:

  • middleware,;

  • enterprise application integration (EAI),;

  • workflow, and;

  • business intelligence tools.;

They are all technical components of the system needed to support BPM or BPMS.

The BPMS

A BPMS is the technology solution suite for a BPM approach to system implementation and management. As with many other enterprise IT solutions, it is fairly useless as an off-the-shelf product set, without supporting management consultancy and IT services capability.

A BPMS must support:

  • process modelling,;

  • asset integration (people and processes),;

  • process administration, and ;

  • process intelligence. ;

The BPMS may also provide packaged processes or process collaborations to run with the system. Those are sometimes referred to as "collaborative applications." They provide a way to stitch together pieces of business logic from various systems to manage the flow of a business process across a number of underlying applications. Typically, those packaged processes will be created to support specific processes within a given vertical industry; examples include provisioning for telcos and claims processing for the insurance industry.

Many different types of players contribute parts of the overall BPMS solution. Many of the component parts of the BPMS already exist as discrete product solutions. We already have:

  • process modelling methodologies and tools,;

  • workflow and EAI products to deal with asset integration, and ;

  • systems administration and business intelligence solutions that get us some way toward the process administration and process intelligence components. However, we do not yet have an elegant, integrated suite of those components to deliver as a BPMS.

There are no fully-functional BPMS products in existence today. The battle to dominate the market during the next year will shape up between IBM with its WebSphere Business Integration suite and SAP with Exchange Infrastructure. A little further out, Microsoft’s BizTalk Server will be a significant technology enabler bringing smaller companies into the BPM market.

So should the BPMS be based on new technology?

Don’t be alarmed, but as you delve into BPM you may come across references to "pi calculus" and new computational models. Existing development tools are based on procedural programming languages, which are constrained by a set of mathematical rules set out in the "lambda calculus": That describes how you can build procedural programming languages, and hence defines the boundaries of what can be created in most programs. This calculus does not formally constrain systems from addressing complex, distributed requirements, but neither was it defined to support them. Robin Milner formalized a different computational model in the late 1980s via mathematical rules known as the pi calculus. That set of mathematical rules is optimized to help people describe complex distributed systems comprised of multiple processes executing in parallel--unlike the lambda calculus.

The process modelling languages that are likely to have most effect in the BPM world are Microsoft’s Xlang and the BPMI’s BPML (the latter being championed by SAP, among others), and those are both specified using the pi calculus. Evangelists claim that this provides a better way of formalizing the behavior of distributed event-based systems, which change state as individual components send messages between themselves. Some, such as Howard Smith, CTO of CSC EMEA (Europe, Middle East and Africa), even argue that we are at the dawn of a new era where applications will be developed specifically to run with a BPMS based on pi calculus.

Given that technology context, it is certainly worth evaluating process development toolkits and process collaborations specified using pi calculus to see what they can do. However, it is not necessary or desirable to replace existing EAI and workflow solutions. New process-centric solutions will have to integrate with existing systems to be useful in the mainstream market.

The role of the professional service organizations

Because BPM is actually an implementation methodology, it is the systems integration community that will prove instrumental in selecting winning product vendors in the BPMS space. The IT service companies are currently content with using best-of-breed components to plug together their own BPMS, which provides an opportunity for some of the smaller players—such as Excelon, Fuego, Intalio and Savvion—to prosper alongside well-established players.

Professional service organizations are extremely interested in BPM for three main reasons:

  • Management consultancy work is suffering a downturn and badly needs the boost of a new trend, hence the hype surrounding BPM, which requires the identification, understanding and modelling of business processes.;

  • Systems integration work is suffering as projects get cut or put on hold. The pressure is on to squeeze margins down, and a methodological approach to system implementation that promises a fast project execution with a flexible deliverable fits the bill nicely.;

  • Outsourcing is the only area of the software service world currently experiencing growth, so expanding current outsourcing contracts is like pushing an open door, but there is pressure to cut margins. A one-to-many business process operation looks like a promising strategy where clients contract to share IT systems, but requires the ability of the service company to manage a shared back office, while letting clients retain control of their own process management. The BPMS seems to be the missing link in this scenario.;

The market prognosis for BPM

There is no discrete BPM market today. The term is not recognized beyond esoteric communities within the IT industry, and much of the technology solution, the BPMS, already exists via other product categories.

For the next 18 months, BPM will exist as a tiny subset of both the systems integration and outsourcing markets. During that time, it will primarily be an IT service market opportunity, rather than a distinct product market for the user community to invest in. Looking further on, it is possible that the BPMS will become a coherent product category, because first releases of "integration servers" are already being offered by IBM, SAP and Microsoft. In three years, those will provide an integrated suite of generic or base BPMS components. However, the added value will continue to come from the rapid process development kits and process collaborations designed by process specialists for niche sectors—and that remains a service opportunity.

Katy Ring is a principal analyst with Ovum (ovum.com), e-mail katy.ring@ovum.com.

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