All organizations doing application development face a series of risks and challenges: Will the application be released on time? Will the quality of the application be good or will there be unexpected problems? What about performance—will the application perform as needed when it’s released in real-world scenarios? Can the deployment and future changes be managed with minimal effort?
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iUniverse is an independent publishing company that helps individuals self-publish fiction and non-fiction books. iUniverse was interested in finding technology that would enable it to build an infrastructure that could improve the efficiencies of the book publishing process as well as provide flexibility for changing business needs. The company turned to Business Process Management (BPM) as a way of automating some of its processes and eliminating inefficiencies that existed. After an extensive search, iUniverse selected Intalio|n3 and implemented the product. It has already used Intalio|n3 to assist its catalog export and several other processes, and iUniverse has a long-term strategic view of migrating all business processes to be orchestrated under the BPMS architecture over time.
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Pegasystems has been automating business-critical processes for F500 organizations with a rules-based solution for 20 years. A public company with 425 employees in offices worldwide, Pegasystems recorded revenues of $97.4 million in 2002. In the past eighteen months, the company has started to shift away from custom-built solutions toward productizing its technology. Process Commander is the platform that combines the technology Pegasystems has been using to automate high-transaction, critical business processes (PegaRULES) with business process management functionality. Process Commander is priced at the enterprise level of the BPM market, with solutions running from $2 million to $10 million and up for enterprise licenses. The sweet spot for Pegasystems is very large financial services, healthcare, and insurance companies that have high volume processes they want to automate, removing human intervention.
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.
Building applications and automated IT processes that are more responsive to business change is a key goal of business process management (BPM) software and new IT technologies like Web services and service-oriented architectures (SOAs). They enable organizations to create modular components and services with new or existing application logic or data and then assemble those components/services in a way that addresses specific business needs.
As organizations create more flexible and dynamic service-oriented infrastructures built around business process services, the types of applications that can be developed and deployed efficiently will increase dramatically. In addition to the “standard” applications that organizations are using today, we believe that there will be new classes of more dynamic, collaborative applications that will result from these new services-based infrastructures. With these new applications will come new application infrastructure requirements, a good example of which is the idea of identity rights management.
While the issue of permissions-where someone (or something) can or can’t do something (or have access to something)-has been an important part of business applications and IT infrastructure strategy for years, it will become even more critical in these new, process-centric and services-oriented applications. Yet there is more to it than just providing the ability for certain people to access (or not access) certain data. Think of it as a step beyond traditional identity management. It’s service-oriented identity rights management and it can be used to control not only who has access to what application or data, but also what group of people have access to what applications or data and, more importantly, what applications (or application components) have access to what other applications and data.
In effect, identity rights management is the management of information and service rights between identities, where identities are responsible for defining the data and service ownership. In other words, the owners of the data (or applications) define the specific access parameters that are appropriate for their data (or applications), with permissions tied to granular data elements with explicit control parameters such as expiration data, access times, and distribution channels. Instead of having to hand-code access for individual applications, developers can use a ubiquitous access rights layer across all applications.
The idea of managing data exchange and application access through the concept of groups is particularly powerful when the groups have membership that spans multiple organizations, for instance, as you might find when individuals in different government agencies have common interests and shared objectives (like monitoring security issues) and need to share information across those traditional agency or corporate boundaries while still maintaining security. Identity rights management extends that idea to help manage not just individual identities, but the relationship of those identities to specific applications or data sources, across application, corporate, and geographic boundaries.
A good example of an identity rights management solution is Epok, Inc.’s TDX 4.0 platform, a web services framework for providing secure and controlled data exchange across networks (public or private). Epok is a founding member of OASIS (the standards organization) and also driving the adoption of the OASIS XRI standard. TDX 4.0 enables permissions-independent exchange and synchronization of information or services across different trust domains (for example, multiple companies or even countries, in the case of government applications) and is designed for applications that require complete (and granular) control of data that’s distributed over multiple trust boundaries. What’s important is that TDX is a horizontal platform for the data owners to assign and manage granular data access control. As a result, business users (or the data owners) can define and manage access to important data, rather than be limited by the application design or requiring application developers to do it through customized code.
Upside Uptake
Service oriented architectures are giving organizations more flexible, adaptable, and ultimately, more manageable ways to create business logic and applications that can be used to address changing business needs. A service oriented design for identity rights management-an intermediary service that controls and manages who has access to what data as well as one that provides virtual, real-time updating of reference data-enables a range of applications and services that would be difficult to create and manage using traditional approaches.
By providing a way to explicitly model the relationships of the data requestors (be they applications or individual users) to the actual data, an identity rights management system can enable more efficient and effective development of applications in areas where large numbers of casual, temporary, or dynamic relationships exist and need to be managed.
We believe that there will be a move towards infrastructure components and tools that help organizations rationally and efficiently define, manage, and monitor very fine-grained access to data and application components in a decentralized fashion. Enabling dynamic and granular access (for both internal and external needs) to data sources and applications will be an important part of many company’s IT strategies, and will complement BPM-enabled solutions.
Recently, Ultimus unveiled plans to take its BPM platform to the next level. Based on the core belief by Ultimus that the greatest benefits from BPM come once an organization starts using an automated process, Adaptive Discovery™ technology is designed to get organizations to that point faster. In most cases, the time and effort spent mapping out a process and determining all of the various rules, exceptions, and changes is longer than anticipated, and it can drag out a BPM project indefinitely. This leads to pressure from management because deadlines slip, and the scope of the project begins to creep outwards.
The idea behind Adaptive Discovery™ is to enable organizations to define part of their processes up front, including user tasks, electronic forms, established routes, and integration points. Then, additional routes, task recipients, and rules can be added or changed once the process has been released. When defining rules, there is flexibility to not just change routing, but also call Web Services or launch other activities using pre-configured .NET assemblies. This enables the development team to get a new process up and running more quickly, meeting important business needs, while allowing for the ability to make changes as missing pieces are discovered or business rules change. Adaptive Discovery™ is designed to be flexible in terms of the amount of information that can be discovered – ranging from full discovery of rules and processes points to partial discover or leaving a process undiscovered.
Ultimus is currently in the finishing stages of the technology for Adaptive Discovery™ and will release it as part of Version 7.1 of the Ultimus BPM Suite in the first quarter of 2005 (Release 7.0 will hit in Q4 of this year, with a number of enterprise-scale enhancements made to the server, security, and administrative functions). The largest structural change for Version 7.1 of Ultimus BPM Suite is that it will include the Ultimus Rules Engine, a new addition to the product’s architecture, and a new module, Ultimus Director, that is used to handle processes implemented with the Adaptive Discovery technology.
Ultimus decided to come forward with the Adaptive Discovery™ announcements at this time to offer customers and the market the ability to better understand the new technology, determine the best usage model for their situations, and reconcile how they can adjust their current approach to BPM deployments.
Upside Uptake
There is no doubt that organizations are getting bogged down in the mapping and process definition aspects of Business Process Management. Bringing together business and IT managers, as BPM requires, involves the communion of two very different philosophies, and trying to hammer out all of the nuances of a long running, complicated business process in a way that can be translated into technology is frustrating at best.
Upside Research believes that existing BPM technologies will need to continue to find ways to make the entire mapping and process discovery phase more straightforward and streamlined to ensure that the momentum felt when a BPM project is launched continues through production, delivering a successful automated process on schedule. While a number of vendors have focused on making their graphical mapping interfaces easier, including drag-and-drop and zero-code enhancements, taking this a step further and allowing the BPM engine to anticipate some of the process flows and help with the process discovery is desirable.
While Ultimus has only just announced this new technology, which the market will not see for another five months, Upside Research believes that new approaches like Ultimus’ Adaptive Discovery™ are definitely a step in the right direction for BPM, potentially enabling a broader range of organizations (or departments) to use BPM for a broader, perhaps less well-defined set of business processes. From interviews with various enterprise organizations, Upside Research believes that there’s a large market opportunity for BPM vendors that can practically and efficiently automate and manage business processes that might not warrant weeks or months of in-depth process modeling. As such, Ultimus is setting the direction for further enhancements in the process mapping and modeling stages of BPM. It remains to be seen how customers will use the technology once they have it in hand, and how well it will help to balance the endless struggle between IT and business process owners. However, one thing is certain: BPM is forging ahead, and should continue to be responsive to both IT and business needs.
Upside Research strongly believes in the value that formalized business rules can bring to process automation, and the value of business process management solutions to an organization. To us there’s no doubt that having a strong business rules capability is an integral component of a complete BPM solution, as well as what should be an integral part of almost every IT infrastructure and application development strategy.
However there are two critical issues that organizations need to confront when evaluating business rules (and BPM) solutions: practicality and reliability.
In order for business rules solutions to be practical, they need to be useable (and manageable) by business users, not just IT administrators or developers. In many ways, that’s where the first generation of business rules products failed-they required programmers do to the heavy lifting, and effectively limited the changes and control that business managers, users or administrators had. Business rule systems that can be driven by businesses provide a variety of important benefits for organizations, including the ability to drive faster business change, reduce operational costs, and even reduce operational risks.
But as business rules and BPM solutions become more sophisticated and more critical to an organization’s application infrastructure, it also becomes more important to ensure that the rules being created or modified within the system are valid and reliable. Business rules systems without integrated validity or consistency checking leave an organization open to logical inconsistencies, or to processes and business rules that do not adequately cover the required solution space. Not surprisingly, this becomes even more important with business rules solutions that fulfill the first requirement above. The more business rules are defined, deleted, modified, or managed by business users, the more critical it becomes to ensure the accuracy, consistency and reliability of the logic and rules when changes are made.
Those are exactly the issues that business rules vendor Corticon is addressing with the release of Corticon 3.0. In addition to enhancements to its Web services support, complete support for localization and internationalization, as well as a new stand alone desktop business rules modeler, Corticon 3.0 include new capabilities for verifying potential logical errors (including loopholes or rule conflicts). Patented technology that Corticon calls the Predicate Logic Matrix™ enables its users to create business rules models that are logically complete and provide unambiguous decision for every possible outcome.
Upside Uptake
Upside Research believes that Corticon 3.0 is a significant step forward in business rules technologies. By combining a focus on both the practical modeling of complex business rules as well as providing technology to verify and ensure the reliability of the modeled business rules, Corticon is raising the bar in the business rules arena.
In addition, its new standalone desktop business rules modeler is a unique approach to broadening the audience for formalized business rules articulation, management, and use. Using business rules technology requires more than simply having developers create and manage a series of complex and arcane business rules. Instead, we believe the biggest benefit from business rules solutions comes when they can be effectively and accurately defined and managed by the business people closest to the business process and management objectives. With its new stand alone modeling capabilities and Predicate Logic Matrix™, Corticon 3 enables a broader set of business users and analysts to define and model business policies while knowing that their reliability is ensured.
Taking a closer look at how a company has successfully implemented Business Process Management is an effective tool for organizations considering BPM solutions. It offers a chance to better understand product selection criteria, implementation issues, best practices, and tangible business benefits. Upside Research has spent the past year and a half speaking with companies that are in the trenches with BPM, evaluating, purchasing, implementing, and maintaining the technologies. The companies have shared with us their best practices and lessons learned as a way to help other organizations in similar situations succeed with BPM. This month, we introduce a new BPM Success Story, SpectraSite’s implementation of Ultimus BPM Suite.
SpectraSite is a $350 million owner and operator of wireless antennae sites on towers and rooftops nationwide. Chances are, if you own a cellular phone and you’ve made a call inside a shopping mall, you’ve used SpectraSite’s services. The company had a number of processes that were taking too long to complete, bogging down business cycles and slowing revenue. One specific business challenge was finding a way to reduce the company’s existing order process, which was currently taking 60 days. The current process was time consuming and the faxing technology was inadequate for the company’s needs.
After a comprehensive evaluation process that involved several vendors, SpectraSite chose Ultimus BPM Suite. According to Chuck Schroeder, IS Director for SpectraSite, “we chose Ultimus because we didn’t want programmers to write the code.” The fact that Ultimus was local (also in North Carolina), well funded, and used Microsoft infrastructure extensively were also considerations. Ultimus fit right into SpectraSite’s existing architecture, making implementation easier. In addition, the graphical designer, org chart components, process-modeler, integrated forms designer, and role-based routing were features that particularly impressed SpectraSite.
Upside Uptake
As we’ve mentioned in recent reports, Upside Research believes that organizations should evaluate BPM products from both a business and IT perspective to identify the most appropriate solution. SpectraSite did a good job of aligning the technology solution it chose, Ultimus BPM Suite, with its existing IT infrastructure, easing implementation and adoption. On the business side, SpectraSite hit the jackpot with Ultimus. The company was able to use the pilot application it created immediately in production, and the process that had taken up to 60 days to complete was reduced to 10-14 days. SpectraSite has seen measurable ROI from the Ultimus BPM Suite. In this process alone, the resulting earlier income is considerable, and Schroeder believes the product has paid for itself in about six months.
Upside Research believes this kind of measurable return on investment for BPM is critical for companies that are evaluating solutions. Understanding exactly how the investment in a BPM technology will pay off to the business, and more importantly, how quickly it will pay off is key to gaining upper management support.
SpectraSite’s implementation of Ultimus BPM Suite has been a resounding success. Since the initial process automation, the company has completed an additional 30 process pieces, and they’re working on another 50. SpectraSites anticipates that Ultimus BPM Suite will be useful for its SOX requirements as well. The value of Ultimus BPM Suite to SpectraSite is exponential, as the company keeps finding ways to leverage the solution to solve pressing business needs.
Things are starting to pick up in the BPM Market. As summer fades into September, leading BPM vendors are making announcements around new upgrades and enhanced functionality to their BPM suites. One of the first companies out of the starting gate for the latest round is Metastorm, and it is announcing its latest version of e-Work, release 6.5, this week. Upside Research was given a sneak peek at the new functionality in e-Work 6.5, and believes that the changes will enable Metastorm to maintain its leadership position in the market, while offering customers and prospects alike several important new capabilities.
Metastorm e-Work 6.5 focuses on offering enhancements to several key areas of the BPM platform, including integration, reporting and analysis, and support for additional technologies and standards. Specifically, the following features will be available for e-Work 6.5:
Integration: Metastorm e-Work 6.5 will ship with an adapter kit for major secure messaging queues, including IBM, Microsoft, and Java
Reporting and Analysis: Metastorm has entered into an agreement with Hyperion, a leader in business intelligence, to OEM the company’s Hyperion Intelligence product, providing users with robust analysis and reporting functionality. Additionally, Metastorm has enhanced e-Work’s Business Activity Monitoring and Management capabilities by providing additional ability for mangers to drill down through the dashboards, and to more easily align performance with established KPIs.
Technology/Standard Support: The latest version of e-Work will extend its support for both the Microsoft environments as well as Java environments, enabling developers to choose between the Java SDK or Microsoft SDK for development. In addition, e-Work 6.5 now supports BPEL standard (both the consumption and generation of BPEL) and will offer Microsoft’s business rules engine as an OEMed product.
In addition to these capabilities, Metastorm has made navigation of the e-Work environment more seamless, by enabling users to move from module to module easily in an integrated fashion. The company is also bringing several new customers up on some of its pre-packaged process kits, most notably in the retail space.
Upside Uptake
Metastorm has been selling workflow and BPM solutions to global 2000 companies for several years, and as such is one of the more established companies in this market. With more than 700 customers worldwide, Metastorm has had particular success selling its solution to the government and legal industries, in addition to the financial services and retail and manufacturing markets.
Upside Research believes that the latest enhancements to Metastorm e-Work will allow it to continue as a leading competitor in the BPM market. The decision to partner with a leading intelligence tool such as Hyperion to provide analysis and reporting capabilities enhances Metastorm’s capabilities in an area that was previously lacking. Upside Research believes Metastorm made a smart decision to go outside for the functionality and continue to focus its in-house R&D efforts on the process side of BPM.
While the product has always been strong on the workflow and human interface side, the new release helps e-Work on the integration side. With its latest release, e-Work ships with adapter kits to the three major secure messaging queuing technologies, in addition to support for BPEL, the standard for BPM integration. The product is also more tightly integrated itself, making it easier for users to move from one module to the next. Metastorm’s recent closer partnership with Microsoft signals the ability of the company to meet its customer base’s needs by supporting all relevant standards. Though, keep in mind that organizations with a depth of integration-specific requirements will need to use third-party products (or the future bundled BizTalk), or consider a more EAI-focused toolset. Ultimately, Upside Research believes that this latest version of e-Work will help Metastorm maintain a leading role in the BPM marketplace.
Hosted applications are nothing new. Application Service Providers (ASPs) made their meteoric rise (and crashing fall) in the late 1990s, as an offshoot of the Internet Boom. The premise was to provide enterprises with the full features and functionalities of applications such as customer relationship management, sales force automation, and supply chain, without the overhead of having to install, manage, and upgrade the solutions. Not everyone bought the idea that you could successfully outsource some of your most business-critical applications, and with the Internet crash of the early 2000s, the ASP market felt the hit.
Since that time, ASPs have existed under the radar, still bringing value to many organizations-just a bit more quietly. Hosted applications can be particularly attractive in situations where an organization does not want to invest large amounts of money or resources to get a solution up and running, but instead is willing to pay an incremental per-user or per-connection charge. While hosted applications typically are not as ideal for solutions that will require extensive integration with existing applications, they nevertheless can integrate to existing resources and add value for markets such as workflow or business process management (BPM), where the initial investments for a solution can be prohibitive for smaller companies.
For example, Nsite, a provider of outsourced workflow and business process management (BPM) solutions that provides software to mid-market companies in a service delivery model. Nsite’s first customers in 2001, primarily in the high tech and semiconductor market, are still using the solution today to route processes throughout their organizations, and in some cases, to suppliers and partners.
The model is simple: customers pick which of Nsite’s pre-existing business processes they want to use (e.g. exception handling for non-standard pricing), and then Nsite activates the customer’s unique web site where they can see those processes. Nsite also allows customers to use their own forms, which may be converted to HTML or simply attached as files for use on Nsite. The client is an existing web browser, and three levels of security protect the applications. For customers that don’t need to customize a process, they can be up and running literally in minutes.
Nsite claims that all of its customers are fully deployed and trained in less than thirty days. The solution utilizes email for notification, and users only have to log into the web site to start a new process or make changes to existing processes.
Upside Uptake
Having covered the rise (and fall) of the ASP in the early 2000 time frame, Upside Research was intrigued by the premise that Nsite brings to the table – instant workflow and BPM without any of the hassles of enterprise applications. Nsite is targeted at the mid-market, and their ideal customer often starts with a departmental process, and then expands to include other departments, additional processes, and in several cases, inter-enterprise processes. We believe this market is much easier to penetrate than some of the enterprise sales that many BPM players are courting today. Because the solution is billed monthly, and can be turned on or off with minimal impact to the enterprise IT infrastructure, companies have a lower risk threshold than with more traditional software implementations.
The ideal type of application that Nsite works with is a process that requires human interaction/response at multiple points, and little or no back-end integration. For example, running a purchase requisition around the company for approval can be solved by simply completing an HTML requisition form on the Nsite portal, and then choosing the list of people it needs to be routed to for approval.
Nsite positions itself as complementary to existing BPM and ERP solutions, and Upside Research believes this is a good position to take. The solution cannot replace the heavy lifting process management and multi-system integration that traditional pure-play BPM vendors such as Metastorm, Fuego, and Pegasystems handle, but it can provide an easy fix to many of the manual processes that companies face each day. More importantly, while Upside Research doesn’t see any other BPM vendors jumping to provide hosted BPM models immediately, we do expect a number of vendors to continue to develop new versions of their solutions that lower the adoption criteria (if only for specific solution areas) and make it more consumable for business managers and users. From this perspective, Nsite makes a nice measuring stick.
Nsite’s success indicates that the BPM market is spreading out to include more of the fringe types of markets, and Upside Research expects there to be additional neighboring markets that will incorporate BPM functionality over the next year. While this will add even more players to the market, it also brings with it further awareness and will lead to more widespread adoption. BPM for the masses? Perhaps it’s closer than we thought.