Tag: BPM

Business Rules for Business People

Posted on by DavidKelly

Today, business success is not just a matter of how effectively an organization can create or sell products. It’s also about how fast it can react to changing market conditions. Speed, flexibility, and organizational agility have become critical success factors for all companies.

Many companies are experiencing some of their fastest rates of change and the most important process requirements at the edge of their business. That’s where the business connects directly with customers, suppliers, and partners. It might be through something as simple as an application used to interact with suppliers or something as complex as customer self-service or B2B supply chain integration processes.

Improving business agility increasingly depends on the ability to quickly and easily modify the decisions and business logic that drive and manage its fastest changing and most dynamic business processes.
As a result, business processes and applications must be brought out to the edge or front office of the organization in order to meet rapidly changing customer requirements, increased user expectations, more competitive market pressures, coupled with the need to increase revenue, customer satisfaction, and other key performance indicators. Unfortunately, most companies have realized too much of their business logic is tied up in applications that are difficult to modify rapidly and adapt to the challenges at the edge of the business.

That’s because business rules technologies traditionally focused on providing greater flexibility for back office applications. Now, however, these traditional rules solutions have proven inadequate at meeting the challenges constant change presents. They’re simply not designed to address the rising demand for agility in front office applications. The architecture of traditional rules solutions can’t cope with the more dynamic environments found in customer-driven applications.

For example, most organizations need CRM applications, sales configurators and other dynamic front office processes to provide users and customers with the flexibility to explore a myriad of options and outcomes as they progress through a business process. Business rule solutions should help drive this agility. Yet, because of their architecture and original purpose, traditional BRE solutions limit users. Such BREs can’t provide dynamic interactivity—what people refer to as “start anywhere, go anywhere” capabilities.

For example, you may think the most important thing when choosing a computer is screen size. Why not start there and choose other options further on down the line? Why does a customer have to start or to go where the company traditionally dictates? Why take a straight-through, single-path approach? This ultimately translates into lost revenue, low customer satisfaction and decreased opportunity for companies.

What’s needed is a new business rule approach that dynamically crosses a wide range of front office business processes and applications: from stand-alone or embedded applications to business processes crossing application and business boundaries. Think of it as dynamic business rules solutions for customer-driven applications.

This white paper provides a perspective on the challenges traditional rules engines and technologies face in addressing today’s dynamic business needs. It also focuses on the new business rules requirements needed to bring processes and applications to the edge of the business, enabling organizations to rapidly meet changing user and customer expectations and needs as well as to run more effective organizations.

Click here to download the complete Upside Research report on Business Rules

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BPM Market Navigates Q1 2004 With Sails High

Posted on by DavidKelly

The winds of change continue to blow through the corporate business and IT worlds, and according to the latest Upside Research, Inc. vendor survey, business process management (BPM) is sailing into the picture for more companies than ever before.

The first quarter of 2004 has been an important test for many BPM vendors, as they have continued to broaden their base and expand their enterprise-class deployments and capabilities, becoming more established players. Many of the vendors have been fortunate, and their financial results indicate a positive year for BPM. Upside Research recently conducted an informal survey of a number of BPM vendors, and the results support our earlier claim that 2004 is emerging as the year for BPM.

Overall sales have grown dramatically. Of the half dozen vendors that responded to this question, all reported growth rates above the 2003 industry average of 15-20%. Respondents indicated that quarter over quarter revenues grew by an average of 44%. And, several vendors saw large multi million dollar sales, indicating more enterprise-scale adoption of BPM.

Key verticals are responding to BPM. BPM vendors are seeing traction in a number of key verticals, indicating that these verticals view BPM as an answer to business challenges such as corporate governance, streamlining processes, and industry regulations. The majority of vendors identified financial services and healthcare as two key verticals. Other verticals seeing more traction from BPM are government and manufacturing.

Geographic breakdown of sales. While all vendors in the survey reported that the majority of their sales are coming from North America, many indicated that several markets are seeing growth, most notably Asia/Pacific Rim/Australia. Several vendors reported big customer wins in Japan and Australia, indicating that this area should continue to see growth over the next year.

Major factors for sales growth. There were a number of similar factors identified by vendors as contributors to their recent sales growth. Among them were:
– Compliance and regulatory pressures
– Cost savings and fast implementation schedules
– Measurable ROI from early BPM adopters
– Global business expansion

These factors have had a positive influence on BPM vendors’ ability to take the message up the corporate ladder and make a convincing sell to C-level executives.

The Upside Uptake
These results are promising for BPM. The solid growth numbers indicate that vendors are gaining traction in important accounts, and the word is spreading that BPM is a viable solution for process automation, cost savings, and regulation and compliance challenges. Upside Research believes that future quarters will continue this trajectory of growth being experienced, and estimates that the overall growth of the market will shift from 15-20% that was seen last year up to 25-30% for 2004. The growth in new markets is especially indicative of the potential for growth of BPM, as the solution becomes a global one, impacting companies around the world. And, with regulatory and compliance mandates continuing to plague corporate managers, BPM adoption will continue to grow as a proven, cost-effective solution.

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BPM and the Maturing SOX Market

Posted on by DavidKelly

Government regulations and mandates are nothing new. Even before the English put a well-known tax on tea in the 1700s, American companies have been complying (or in that case, rebelling against) government regulations.

While no one has rebelled against it, the Sarbannes-Oxley Act of 2002 is one recent regulation that is impacting almost all U.S. companies. A series of questionable business practices in a limited number of high profile companies through the 1990s and early 2000s led the government to significantly tighten the reporting requirements and certification of controls and procedures for public companies in 2002, resulting in the Sarbannes-Oxley Act of 2002.

Intended to restore public confidence in corporate governance, the Sarbannes-Oxley Act (also commonly know as SOX) required all public companies, and many private ones, to improve the transparency and accuracy of financial accounting. For example, the act required CEOs and CFOs to sign off on their companies’ financials and to certify their financial controls and procedures. As a result, over the past couple of years public companies have been working to meet these new requirements through increased definition, accounting, and reporting of their financial processes.

SOX compliance includes different aspects (such as Section 302’s quarterly reporting requirements and 404’s annual reporting requirements with its evaluation of internal controls), but it all boils down to being able to define your financial processes, report on them, and manage change (and compliance) over time.
For many companies, SOX is a perfect opportunity to move towards a business process management platform. While initial requirements, such as defining processes and reporting on them, don’t require true business process management capabilities, the fit is obvious: by using a BPM solution to define and monitor their financial and reporting processes, organizations are automatically ready to take the next step of using a BPM product to manage change over time. Using a BPM solution as the underpinning for SOX compliance provides organizations with increased flexibility and potential competitive advantage in being able to reduce the cost of compliance over time (through automation) as well as the ability to ensure compliance even when financial or business structures are changing.

Realizing this opportunity, a number of BPM products have added support for SOX, including companies such as Handysoft, which has even built separate SOX-specific applications based on their BPM platform. In fact, Handysoft recently released version 2 of its SOXA Accelerator, highlighting the increasing maturity of BPM-based SOX solutions. Handysoft’s SOXA Accelerator 2.0 provides a number of new features, including compliance dashboards (making it easy for corporate managers to understand the status of the financial reporting systems), and SOX frameworks from major audit firms. Additional updated capabilities include new rollup and certification capabilities for section 302 and 404 compliance that allow business unit managers or executives to determine if material changes have taken place, as well as increased visibility and reporting options that provide pre-configured reports and key performance indicators for more rapid understanding of financial reporting status.

Upside Uptake
Upside Research believes that Handysoft’s SOXA Accelerator 2.0 is a sign of the maturing BPM/SOX market. It provides solid support for the required regulation compliance, but it can do much more. What’s more important is that companies begin to realize that they can take SOX compliance to the next level that by investing in a product such as Handysoft’s SOXA Accelerator (or other BPM/SOX solutions), they can lay the foundation for a dynamic business process management solution that provides benefits beyond compliance.
Modeling, auditing, and reporting on your financial processes is simply the first step-although it’s the big one for SOX compliance. Smart organizations will realize that once they’ve implemented it via a BPM solution, they’ll have the ongoing capability to dynamically modify, monitor, and manage those processes over time. More importantly, a BPM-enabled SOX solution provides the foundation for extending business process management beyond the financial reporting arena and linking it even more closely with other business processes, providing a way to reduce costs, institutionalize best practices, and provide a dynamic platform for increasing revenue.

While Upside Research believes that SOX solutions like Handysoft’s SOXA Accelerator are good, they are only the first step. Organizations must move beyond the mandated SOX reporting functions to utilizing the true business process management capabilities that underlie BPM-based SOX solutions. And, as with any technology solution to a business problem, organizations should not view the SOX solutions as a band-aid to fix their corporate financial processes, but rather an opportunity to review and create best practices around financial reporting.

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SOA and BPM

Posted on by DavidKelly

Service-oriented architectures (SOAs) are nothing new. They’ve been around (in one guise or another) since at least the early 1990s. In fact, the latest development in service-oriented architectures-Web services-has now been around approximately four years. So, what’s the big deal about IBM’s SOA announcement on April 21st? Quite a bit, if you’re interested in business process management (BPM) and can wait until later this year for the rest of the story to play out.

In fact, what wasn’t in the announcement is probably more important that what was in it. IBM basically announced new software and services that enable customers to move toward a service-oriented architecture. Specifically, new versions of WebSphere Studio Application Developer Integration Edition (WS AD) and the newly renamed WebSphere Business Integration Server Foundation (WS BISF) 5.1.
Both include new, BPM-oriented support. For example, WebSphere Studio Application Developer includes a visual process designer and debugger for creating BPEL4WS 1.1 process flows, while WebSphere Business Integration Server includes native deployment support for BPEL4WS processes. In addition, WebSphere Application Developer also includes automated migration of version 5.0 process flows into BPEL4WS flows. These are solid, BPM-oriented additions to the WebSphere product family.

What IBM didn’t announce is a variety of future product changes, expected later this year, that will further support SOA and BPM. For example, support for WebSphere Business Integration Modeler and Monitor is expected in the second half of the year, as well as a future announcement on their Common Event Infrastructure, a unified approach to managing events at both the system (a la Tivoli) and business levels (and a key ingredient of a good BPM platform).

Upside Uptake
While service-oriented architecture is yet another buzzword that organizations have to digest, the process of turning business and IT functionality into discrete services that can be composed, combined, and dynamically managed is no doubt the fundamental direction that most organizations are (or will be) moving in over the next five years. This is particularly important for any organization interested in BPM because services-oriented architectures provide a dynamic foundation that makes true BPM not only easier, but more effective.

What’s important in this announcement is that fact that IBM’s latest WebShere releases (both the development tools and runtime environment) support BPEL and move BPM toward a core functionality expected in fundamental IT infrastructure components. IBM’s future announcements (and product directions) are also critical to the future of BPM and SOA. While IBM is a large company that may not always be the first to deploy new technologies (though they certainly adopted Linux moderately quickly), the fact that it is driving its customer base toward SOA and BPM standards and technologies is important because it furthers the acceptance of these technologies and reduces potential risk from their adoption. That’s why Upside Research believes that IBM’s SOA announcement is important to BPM vendors and any organization interested in building a more dynamic IT and business application architecture.

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BPM Market Consolidation – Tibco Swallows Staffware

Posted on by DavidKelly

This morning, Tibco Software Inc announced it had reached an agreement to purchase UK-based Staffware plc for approximately $217 million.

While Tibco is well known for its message bus software and has a strong EAI heritage, particularly in high-end applications and industries like financial services, it has had difficulty over the past couple of years moving beyond its integration heritage. Likewise, while Staffware’s workflow (and to a less extent, BPM software) has strong penetration on the UK and Europe, it has struggled over the past couple of years to create a viable strategy for the U.S. market.

Upside Uptake
This move is another indication of the maturing of the BPM market, and probably not the last acquisition of a BPM company that we’ll see this year. From a pricing perspective, Staffware did well, reaping $217m against revenues of approximately $76M for 2003, and boding well for the valuations of other BPM companies.
Upside Research believes that this is a solid acquisition for Tibco, and a reasonably good exit strategy for Staffware, especially at that price. On the surface, each company complements each other nicely from a geographic and technology perspective, and both are accustomed to high-end, enterprise sales cycles and deployment requirements.

Despite a broad array of integration/workflow/BPM technology, Staffware’s software growth had stalled somewhat over the last year and it was unable to gain a strong foothold in the U.S. market despite repeated attempts. Instead, they remained fairly dominant in the UK and Europe, complementing Tibco’s U.S. strength. Despite Tibco’s acquisition of process-oriented vendor InConcert a few years ago, it has not been able to make a name for itself in the business process arena-remaining in most people’s minds as the enterprise message bus and EAI company.

However, there are some questions. Staffware’s enterprise projects tend to involve significant services component and many engagements require a repository and content management capabilities-capabilities that may go beyond the Tibco/Staffware technology stack. Also, in order to be successful, Tibco will need to par down the extensive Staffware process and integration options, while clearly delineating when and where customers should Tibco integration capabilities vs. Staffware. And while Staffware has heavily marketed its newer, iProcess business process engine, it’s not clear how many companies have actually deployed it. Despite repeated attempts, Upside Research has yet to talk to fully deployed Staffware customer actively using the iProcess engine.

Another challenge for a successful acquisition will be Tibco’s ability to move from its traditional message bus, IT-oriented perspective to the sales and deployment of higher-level business process solutions. While there’s no doubt that Tibco has an enterprise pedigree, the Tibco’s challenge is to move its sales force and marketing message to a more business oriented level.

Given the magnitude of this deal, along with the geographic considerations and product line questions, Upside Research believes that in the short term (through the end of 2004) this acquisition may actually benefit the other BPM companies more than Tibco/Staffware. However, if Tibco is able to address the issue raise above, provide prospects with a solid technology roadmap for the combined product set, and articulate a higher-level business process oriented message, it could become a leader in the BPM market in 2005.

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BPM Movement Gaining Speed in U.S

Posted on by DavidKelly

In a previous Upside Update, Upside Research marked 2004 as the year to watch BPM. A notable development that substantiates this prediction is the decision by the Business Process Management Group (BPMG) to boost its presence in the U.S.

The Business Process Management Group (founded in 1992) is a global business club exchanging ideas and best practice in business process and change management. BPMG has over 6,500 members across all business sectors. Through case studies, seminars and research they provide members with the opportunity to interact with BPM vendors and learn about the latest developments in the market.

“We feel that the demand is there [in the US] for more research, data, and training on BPM,” stated Stewart Ashton, chairman of the board of BPM Ventures, the company that owns BPMG, in a recent interview. Ashton outlined BPMG’s plans for increasing its presence here in the states, and launching a BPM training program, that will include a certification process and working to establish working standards for BPM design and development

Currently, BPMG is establishing a Boston-based office in Burlington and has several training and ‘Technology Showcase’ events planned in North America. In addition their training team is providing direct support for organizations seeking certification in BPM.

BPMG’s arrival on US soil joins the ranks of a number of existing resources for companies in the throes of BPM initiatives. One of the primary benefits of these types of forums is its ability to connect users with other users that have experienced or are experiencing similar situations relating to BPM initiatives. From the vendor side, these resources provide a targeted audience to deliver their messages, and are thus supported by numerous BPM vendors.

Upside Take
While BPMG’s addition to the list of resources for a BPM user is a positive impact on the BPM scene, the idea of organizing a BPM certification program is a more important one, because it relates to another trend Upside Research has seen in recent months. Many of the companies we have spoken with who are currently implementing BPM are approaching their IT staff in a new business-focused light.

When selecting IT members to assist with a BPM rollout, managers often look for business-process skills. In fact, a few of the companies we’ve recently interviewed have shared that their current and future open requisitions for IT hires require a business-related background to ensure that business goals are reflected in IT development projects.

BPM is one of the most likely areas to benefit from this fusion of business and IT acumen. A challenge for many companies, however, is finding ways to help their existing IT staff acquire more business-focused skills prior to launching a corporate-wide BPM initiative. Upside Research believes that the training program BPMG has outlined is a good fit for these companies. Sending IT to training that will help them broaden their business process skills while also teaching fundamentals of good BPM design and best practices will help ensure that a corporate BPM initiative starts off on the right foot.

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Fuego 5.0 Raises the Bar

Posted on by DavidKelly

As we outlined in the last two Upside Update newsletters, Upside Research believes that 2004 will bring BPM products that are more business focused. With a surprisingly strong offering in its new release of Fuego BPMS 5.0, Fuego is set to up the ante in the BPM game, as well as providing a proof point for some of our predictions.

Incorporated as a US-based company in 1999, Fuego has emerged as a “pure play” BPM company, focused primarily on helping companies automate and manage their processes. Its previous offerings have been solid products that have delivered practical BPM solutions to a variety of companies. However, like most sophisticated BPM products, the Fuego solution required quite a bit of work to try out-even for prototyping purposes. For example, as with many BPM products, organizations interested in trying it out would typically have to involve DBAs to set up access to a database and/or the appropriate directory structure.

Fuego 5.0 is set to change all this. In 5.0, Fuego has not only abstracted and simplified the configuration, development, administration, and management aspects of modeling and deploying a business process, but they have also enabled almost any organization to download and model a BPM solution without extensive training. Fuego has also eliminated the risk of potential customers wasting their time by enabling them to turn their prototypes into production ready processes. With the release of 5.0, organizations can now download a free, fully functional evaluation copy of Fuego Process Orchestration Studio, Fuego’s new modeling, development, and testing interface for process development. With the Orchestration Studio, users can actually build and model processes they can run on a single machine. The Studio includes a full runtime capability (albeit for debugging and testing purposes only) and its self contained nature eliminates the need for developers to setup databases or directory structures. If the results of an organization’s prototyping efforts are favorable, users can move their process to a runtime environment by purchasing either the Fuego Express Engine (departmental) or Fuego Enterprise Engine.

In addition, Fuego has updated its traditional CIL development language with Fuego Business Language (FBL), eliminating the need to learn CIL as well as a fair amount of the coding that was traditionally required. Designed to make it easier for business analysts to model processes, the Orchestration Studio extends FBL capabilities by providing automated support for graphically developing process logic, through new procedures and screen flows that business users can use to design their processes.

Upside Uptake
At Upside Research, we were able to easily download, configure, and use Fuego 5.0 seamlessly from the Web, in contrast with the cumbersome configuration routines we’ve experienced with other BPM products. Upside Research believes that Fuego BPMS 5.0 is an innovative BPM solution that has significant advantages for both business analysts and IT developers. Fuego 5.0 has several new features that position Fuego in the forefront of pure-play BPM vendors.

Upside Research is impressed with the free availability and download of the Fuego Process Orchestration Studio (the development environment) and believes that this is a good strategic move that other BPM vendors will have a tough time responding to. The fact that Fuego Process Orchestration Studio can now be downloaded and used freely to develop production-ready processes is important because it means that it’s easier than ever for organizations to get started evaluating BPM solutions.

Fuego 5.0 also includes new simulation capabilities that are important for pre deployment analysis, enabling analysts to test their process models prior to release. In addition, the simulation can be used post-release to compare results with the anticipated results, and iteratively plan for the next release.

While it’s still early in the year, Upside Research believes that Fuego 5.0 is an important milestone in 2004 BPM developments. Let’s see if the other companies can catch up.

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