After a promising start to the year, BPM has continued to gain visibility through the final quarters of 2004. A recent informal market survey that Upside Research conducted with both BPM vendors as well as BPM corporate adopters indicates that interest in BPM remains strong, and enterprises are trying to fit BPM into their larger strategic IT initiatives as they continue to understand the potential this process-oriented technology offers.
Among the highlights of the recent survey are the following encouraging results:
Overall sales continue to grow. Nearly a dozen vendors responded to this question, and the average increase from Q2 to Q3 2004 was 21%. While this is a bit slower than the first quarter (averaging 44% over Q4 2003), it still pulls the overall average above the 15-20% growth rate that the BPM Market saw in all of 2003.
Vertical focus drives product differentiation. As mentioned in the last market survey (May 2004), several key verticals have responded well to BPM solutions. Among them are financial services and healthcare, with an increased interest in retail and manufacturing as well. Among the vendors that have introduced vertical-specific product modules are Metastorm, with its retail module, Fuego’s Sarbanes-Oxley offering, and Commerce Quest’s vertical templates.
North America continues to be sweet spot. By far, the majority of enterprise BPM sales are taking place within North America (averaging 60% of total sales), although other areas around the globe are seeing an up tick in interest, as BPM vendors expand their global sales presence in key countries. Latin America is seeing considerable growth for certain vendors, and in Europe (average 21% of sales), England is at the forefront for adoption. The Asia Pacific Rim has been slower to adopt BPM, but in 2004 some vendors have been successful selling into that market.
IT/business sharing BPM ownership. One of the most difficult challenges of BPM’s adoption has been the determination as to where the ownership of BPM lies, with IT or with Business. Upside asked vendors how they’ve seen this issue change over the past six months, and they have indicated that the most successful implementations are those companies that understand the need to align both IT and business closely. While there are differences between where the budget for purchasing BPM lies, in almost all cases IT is involved for final sign-off, even though increasingly business is the side bringing the technology to the attention of senior management.
The Upside Uptake
Upside Research believes that the results from its recent survey continue to be encouraging for BPM. From the steady increase in both interested buyers as well as actual sales and implementations, BPM continues to gain solid ground. Upside Research believes that 2004 will finish out ahead of 2003 in terms of overall growth, up to 25-40% over 2003 levels.
This should position BPM to perform even more strongly in 2005, as continued business pressures such as compliance, competition, and regulation drive adoption of BPM. Global expansion will be key to hitting these projected growth rates, and they are attainable if BPM vendors continue to strategically build out their direct and indirect sales forces to build presence in the emerging world markets. Upside Research will be releasing its 2005 predictions shortly, covering in more detail the areas where it believes the greatest BPM impact will occur. For more detailed information on the results of our informal market survey, look for our upcoming “State of the BPM Market” report.
