TABLE OF CONTENTS

NOTES & RESOURCES

BPM Has Become Mainstream Who Responded? Larger Firms Lead The Way Deployments By Size And Location Targeted Functionality By Size And Location The Most Widely Used BPM Vendors Increased Productivity Is The Most Common Benefit What Metrics Did Respondents Use? The Impact Of BPM A BPM Center Of Excellence — The Secret Sauce The BPM COE Value Proposition The Makeup Of A BPM COE recommendations Stack The Deck In Your Favor — Support The Implementation Of A BPM COE What it means Expect Significant BPM Tool Convergence Over The Next Five Years

In September of 2007, Forrester surveyed 449 decision-makers in North American and European related to their adoption levels of enterprise service bus (ESB), BPM, and information-as-a-service (IaaS) technologies. In addition, Forrester conducted a separate survey of 164 US and UK enterprise architects in October of 2007 to determine the status of BPM deployments in their enterprises. Related Research Documents EA And Metrics: For Maximum Impact, Measure The Business Value September 13, 2007 BPMS Revenue To Reach $6.3 Billion By 2011 July 30, 2007

BPM HAS BECOME MAINSTREAM

A recent Forrester survey of more than 400 decision-makers at North American and European enterprises found that 60% were already using BPM, and an additional 19% planned to do so in the next 12 months.(see endnote 1) Interestingly, these adoption rates even surpassed the usage and interest levels of service-oriented architecture (SOA) (see Figure 1).

A second survey of more than 160 US and UK enterprise architects conducted in October of 2007 found that more than 85% were either actively planning for BPM deployments or already had one or more BPM efforts under way (see Figure 2).(see endnote 2)

Both of these surveys confirm that BPM adoption has already become a mainstream activity in the majority of enterprises and validate the use of BPM software suites to improve the effectiveness of key enterprise processes. Why has BPM become such a major objective inside of enterprises in such a short period of time?

The focus is on processes. It has become clear to a growing number of organizations that one of the best ways to improve operational performance is through the enhancement of cross-functional business processes. This is driving enterprises to reexamine their core business processes for improvement opportunities, both internally and externally.(see endnote 3)

The tools are mature and comprehensive. Whether an organization is looking to integrate processes across its value chain, coordinate human tasks, or improve the effectiveness of document processing, there are comprehensive BPM suites that address each of these requirements. Integration-centric BPM suites (IC-BPMSes) are a good choice for integration-intensive process improvement efforts, while human-centric BPM suites (HC-BPMSes) are better for controlling the flow of work between individuals.(see endnote 4) And document handling is the bailiwick of the document-centric BPM suites (DC-BPMSes).(see endnote 5)

Competitive pressures have never been greater. Increasing pressure stemming from both local challenges and global competition is demanding higher levels of operational performance.

Figure 1: Familiarity And Adoption Of ESB, BPM, And IaaS Technologies

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Figure 2: Status Of BPM Efforts

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Who Responded?

The respondents to the October 2007 enterprise architecture BPM survey were VPs, directors, or managers of enterprise architecture (57%); chief architects (24%); or enterprise architects (20%). Their organizations were located in the US (67%) and the UK (33%) (see Figure 3-1 and see Figure 3-2).

Our survey broke down organization size by the number of employees in each organization and annual revenue. On an employee basis, 20% of the respondents were from organizations with more than 20,000 employees, 14% had between 10,000 and 19,999 employees, another 14% had between 5,000 and 9,999 employees, 40% had between 1,000 and 4,999, and 12% had fewer then 1,000 employees (see Figure 3-3).

On an annual revenue basis, 16% of the organizations had income in excess of $5 billion, 21% had revenue between $1 billion and $4.9 billion, 12% had revenue between $500 million and $999 million, 27% had revenue between $100 million and $499 million, and 21% had income of less than $100 million. Company size varied by geographical location, with 49% of the US-based respondents hailing from enterprises with more than $1 billion in revenue while the UK-based respondents accounted for only 17% of those with more than $1 billion in revenue (see Figure 3-4).

Manufacturing was the most common sector of the respondents, coming in at 27% of the total. This was followed by financial services at 19%; professional services at 15%; retail and wholesale at 9%; transportation and logistics at 6%; public services at 6%; construction at 4%; utilities at 4%; telecom at 4%; government at 3%; and media, entertainment, and leisure at 3% (see Figure 4). Overall there was a high degree of commonality related to the sector component between the US and UK respondents.

Figure 3: Survey Demographics

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Figure 4: Industry Makeup

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LARGER FIRMS LEAD THE WAY

The survey results indicate significant progress related to BPM efforts across the board, but as one might expect, the larger firms have more available resources and are leading the way with production deployments.

Deployments By Size And Location

The status of deployments by company size was similar in the area of planning/research but larger firms had a significant lead over smaller firms in having BPM in production in multiple departments. When looked at by geographical location, UK firms held a slight lead in having BPM in production in multiple departments (see Figure 5).

Figure 5: Stage Of BPM Deployment By Company Size And Location

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Targeted Functionality By Size And Location

The implementation of specific BPM functions showed a high degree of similarity when looked at by company size. However, there is significant variability in the higher levels of adoption of process modeling, process redesign, and process reporting in US firms compared with those in the UK (see Figure 6).

Figure 6: Targeted BPM Functionality By Company Size And Location

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The Most Widely Used BPM Vendors

We asked respondents to identify the software vendors that they were currently using for BPM projects. We allowed multiple answers, and respondents made a total of 501 selections. This averages out to a little more than 3.5 BPM vendors per respondent who answered this question. While at first glance, this may seem surprisingly high, we believe that it is an accurate portrayal of current implementation patterns. Forrester has noted for some time that it was unlikely that a single BPM tool could meet the full range of requirements that include integration, human workflow, and document processing capabilities, and these numbers seem to back up this position (see Figure 7).

Figure 7: Most Widely Used BPM Vendors

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INCREASED PRODUCTIVITY IS THE MOST COMMON BENEFIT

The respondents' perceptions of the primary benefits of BPM were widely distributed across multiple answers, reflecting the diversity of organizational issues and success levels of the BPM efforts (we allowed only one response for this question). Top benefits cited by respondents included increased productivity of process workers (24%), the ability to provide real-time visibility into key processes (18%), and the ability to change processes quickly and easily (15%).

Surprisingly, process optimization came in near the bottom of the list, indicating a focus on real, pragmatic results (i.e., increased productivity) over more general goals (process optimization) (see Figure 8).

Figure 8: Primary Benefits Of BPM

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What Metrics Did Respondents Use?

The respondents used a variety of measurement techniques to evaluate the success of their BPM efforts, and their responses indicate a high degree of uniformity from both $1 billion-plus ($1B+) enterprises and those with less than $1 billion in revenue. The top four metrics were:

Process cycle times and customer satisfaction. These two metrics tied for first place, with 57% of $1B+ enterprises listing them as a key metric.

Risk reduction and process error rates. These two factors tied for third place, with 52% of $1B+ enterprises listing them as key measurements.

Other metrics that were listed included process volumes, ROI, and compliance, but these were generally used in less than 50% of the enterprises. Interestingly, 5% of the $1B+ firms indicated that they did not use any metrics to gauge the success of their BPM efforts (see Figure 9).

Figure 9: Metrics Used To Measure BPM Success

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The Impact Of BPM

Gauging the impact of BPM efforts is critical to an evaluation of whether or not they resulted in improvements that could offset the cost of the implementation efforts. Survey results were mixed: 37% of the respondents indicated that their BPM efforts had led to clear, measurable benefits; 42% indicated they had both successes and failures related to their BPM efforts; and 18% reported no measurable benefits to date.

The conclusion must be that BPM is no silver bullet, and there is no guarantee that BPM efforts will lead to clear benefits in all enterprises or in all scenarios. This should not be surprising as BPM efforts are relatively new; while the technology is generally quite capable, we believe that there is a significant variance in implementation skills and organizational commitment to process change among the enterprises trying to implement it (see Figure 10).

Looking at this from a different vantage point, we find more encouraging results from the perspective of goal achievement, with the vast majority of firms of all sizes stating that their BPM projects either met or significantly exceeded their goals after the initial project implementations (see Figure 11).

Figure 10: The Impact Of BPM Efforts

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Figure 11: BPM Results Versus Expectations

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A BPM CENTER OF EXCELLENCE — THE SECRET SAUCE

A closer look at Figure 10 provides dramatic evidence of the value of a BPM center of excellence (COE) in contributing to the higher levels of success of BPM efforts. For example, almost half (49%) of the enterprises that reported clear and measurable benefits from their BPM efforts had a BPM COE in place; only 10% of the group reporting mixed results had a BPM COE in place; and 4% of the group reporting no BPM success had a COE in place.

In addition, BPM project performance related to enterprise goals also appears to be directly linked to the availability of a BPM COE. Specifically, 67% of the enterprises that reported their BPM efforts significantly exceeded their goals had a BPM COE, and none of the enterprises that reported no BPM project success had a BPM COE.

Clearly, while a BPM COE may not be a panacea for BPM success, having one in operation significantly increases the odds of BPM success.

The BPM COE Value Proposition

Forrester defines a center of excellence as:

A formally appointed and documented body of knowledge and experience on a particular subject area with the goals of providing expertise, managing governance practices, and supporting projects associated with the subject area.

Why are BPM COEs so important when an enterprise is trying to address process improvement efforts? How are they able to provide higher levels of success for enterprises that use them compared with enterprises that try to implement BPM without one? The answer can be found by looking at what is required to make BPM projects successful. The key requirements are (see Figure 12):

Organizational desire. This is the level of organizational commitment to BPM success.

A methodology. A standardized approach for guiding process improvement efforts.(see endnote 6)

BPM technology. Multiple categories of BPM tools provide specialized features.

Figure 12: The Value Of A BPM Center Of Excellence

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The Makeup Of A BPM COE

A BPM COE should be a joint business-IT team that coordinates the implementation of BPM projects within the enterprise and should have a diverse makeup that would include:

A process visionary. The process visionary is a business-focused individual with a solid understanding of proven process improvement methodologies

A BPM project manager. The project manager is someone with strong project management and communications skills.

A BPM tool expert. This is a business person who has a working knowledge (from the business perspective) of the BPM tool that has been implemented.

Domain project experts (multiple). These are individual business people who would be called on to provide domain expertise as needed.

An enterprise architect. This IT person would coordinate project activities with the IT organization as needed.

ENDNOTES

1. The specific question was "How familiar are you with each of the following technologies and processes: ESB, BPM, and IaaS?" Source: Enterprise And SMB Software Survey, North America And Europe, Q3 2007. Back to Text

2. Source: October 2007 US And UK Enterprise Architect And Business Process Management Online Survey. Back to Text

3. The subject of improved process improvements that include external partners is a key issue to be addressed during B2B modernization efforts. See the December 10, 2007, "B2B Integration Trends: B2B Modernization" report. Back to Text

4. Forrester conducts periodic evaluations of the leading IC-BPMS products. See the December 20, 2006, "The Forrester Wave™: Integration-Centric Business Process Management Suites, Q4 2006" report. This is also true for HC-BPMS products. See the December 19, 2007, "The Forrester Wave™: Human-Centric BPM For Microsoft Platforms, Q4 2007" report and see the August 2, 2007, "The Forrester Wave™: Human-Centric BPM For Java Platforms, Q3 2007" report. Back to Text

5. We evaluate document-centric process improvement tools on a periodic basis. See the July 9, 2007, "The Forrester Wave™: Business Process Management For Document Processes" report. Back to Text

6. Using a process improvement methodology is a good idea, especially when the organization has an established commitment to efforts that incorporate Lean, Six Sigma or TQM. See the November 21, 2007, "Making The Marriage Work: Lean, Six Sigma, And The Business Process Maturity Model" report. Back to Text

Find Documents In Related Categories This document falls under the following categories. Click on a link below to find similar documents. Analyst: Ken Vollmer Technology: Business Process Management, Enterprise Architecture, IT Management, IT Organization, Packaged Applications Geography: Europe, North America

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