Has BPM Reached a Tipping Point?

This statement is one of the interesting findings of a survey of over 1000 executives carried out by UK-based research firm FreshMinds on behalf of my colleagues in Capgemini Business Process Management. You can read the full version as a download here. But as the performance of two leading players in the BPM market Pega and Lombardi show – backed by comments from the market analysts – is that BPM is a very high growth market. The survey pulled out a lot of interesting background comments as well as a straight recording of what is happening on major issues in terms of reasons for, and level of adoption. I believe that these background issues explain the comments by Jim Sinur the Gartner Analyst who questioned in his blog  recently, why year by year the BPM market outperformed the analysts’ predictions.

BPM is not Dead: Changing the Approach to ERP

There has been a ‘BPM is dead’ point of view for a number of years, hence the title of Jim Sinur’s blog post ‘BPM is dead – Not’. But this is very much linked to the idea that investment in ERP processes will slow right down and that BPM is part of this market. This shift was identified back in 2009 by a number of commentators and linked to big-project ERP dying in exchange for the need for smaller, faster, cheaper ‘ERP’.  For example, see this piece posted by InfoWorld entitled ‘Why the big ERP approach is dead’.

This debate has moved on, as has of course the approach to ERP by the major technology vendors.  And for the last couple of months, Forbes Online has been running an interesting debate on ‘the end of ERP’.  There is a good cross section of representation in the posts and it’s all worth reading.  However the point of view in the post I highlighted states that it wasn’t that ERP was dead, but that it was just moving to the cloud. Or rather more specifically: what we want from ‘process’ is changing with respects to new enterprise reactions and requirements to new competitive circumstances.

As proof of this, one of the other key findings was that C level Executives saw the need for ‘processes’ to be able to be developed and changed rapidly to support market and customer initiatives and changes. Hmm not really what we associate with ERP, but very much what BPM provides. In much the same way the ability to ‘operate’ successfully by using ‘processes’ to deliver the business capabilities came up as well. And of course the third point was being able to operate at less cost. The automatic linkage is to see processes in terms of the third point, after all that’s what we have spent the last twenty years focused on! And the weapon to deliver this has been ERP and the automation of back office processes, which create the undesirable and non-competitive overheads in the business.

Good to Great: Stable Back Office with Agile Front Office Processes

Compare this with the second point about delivering business ‘capabilities’ and think instead about using the word ‘competences’. How did Volkswagen-Audi Group, VAG, get to where they are today? Better back office administration or being better at the core competencies of designing, building, selling, and servicing cars? Well you need the first to stay in business and be able to successfully operate for sure. But the ‘good to great’ difference is in their core competences and these are going to be based on ‘standardized ERP’ back office operations. As every aspect of business and society becomes technology linked and online, the interaction and creation of simple and fast ‘processes’ to deliver whenever and wherever becomes critical. Everything needs to happen in this fast moving domain. Increasingly that means the need to make an effective interface between the stability of back office pretty, fixed ‘procedures’ and the constantly changing ‘services’ of the front office.

The survey shows the simple fact that the world has changed: the last five years or so of shifting to online multichannel ways to do business. With industries, such as banking and insurance, having moved that way, more and more industry sectors have to think and change their behavior though embracing the ‘innovation’ in business models. BPM is being pulled into the enterprise from the edge and front office to do business in a rapidly changing, more agile manner. This is in contrast with ERP being pushed into the enterprise from the centre and back office around stabilizing and centralizing.

The old mantra of ERP ‘do more of less’ – meaning to reduce the variations in activities and processes as well as products to focus on a core market – has given way to ‘do less of more’ as customers demand to be serviced in a globally competitive world on their terms. There is the less obvious non-ERP driver for the growth of ‘processes’ and the reason for the constant rise in BPM!