« What do you think is the way ahead for pure play BPMS vendors? | Home | Anarchy: AKA a World without Rules »
BPM Yields Steady Returns in Good Times and Bad
By Jim Sinur | October 31, 2007
When you look at the proof points for the economics of BPM, it is amazing that the BPM market isn’t making headlines in the Wall Street Journal. When you look at the average returns of BPM projects, they consistently eclipse 15% ROI according to early Gartner studies. So why are the results lost in the noise of everyday business?
I think there are two major reasons. One is that the investment markets up until now are yielding pretty excellent results without all the effort it takes to gear up BPM properly with the right skills and executive sponsors that can give the BPM efforts the processes and goals to concentrate on for lasting success and consistent ROI.
The other is that executives may not be aware of the state of their real processes and how many exceptions there are to those processes. We all know that 80% of the business events/cases drive 20% of the costs and that 20% of the business events drive 80% of the costs.
Process Discovery is the Answer:
There are a couple of ways to deliver the benefits of BPM. One is systematic and follows a strategic methodology that includes the steps of agreeing on your level of process maturity, evaluating your culture, defining your organizational response for BPM, searching for an executive that will stay committed, setting objectives with critical measures for alignment, resource optimization, building governance structures, building scientific baselines, changing the reporting structures and documenting a detailed plan.
While this is a noble and correct list of things to do, once one is holistically committed to BPM and changing the business significantly, and something to reach some day, there is another approach that will allow an eventual evolution to the above methodology.
Because most organizations are not at this level yet, I would recommend a guided process discovery effort to look for low hanging fruit in the context of an end-to-end process. One way is to model the existing process-looking opportunities. These are often called “process workout sessions” that include key participants that model the existing and target process.
The other approach is to instrument existing processes to figure out what is really happening. These can work in tandem by modeling the basic process and collect simple measures to verify the direction of the existing processes. This can be done manually, but most efforts can benefit from a tool that can model and measure. In either case, an experienced facilitator is a key to success.
Bottom Line BPM Yields Hard Benefits
Gartner projects a 23% compounded annual growth rate for BPMS vendors, and IDC is even more optimistic with a 44% CAGR. This trend would indicate lots of new organizations taking up the BPM ROI bet and/or expansions of efforts in companies that have tasted early results. Process discovery is a sure bet to get short term ROI while building to more formal BPM methods.
Topics: BPM |
October 31st, 2007 at 3:21 pm
[...] BPM Yields Steady Returns in Good Times and Bad (tags: bpm) [...]