Business process management (BPM) as a category of software is highly fragmented because it’s really a catch-all term that spans everything from automating common workflow tasks to complex machine-to-machine interactions. There is usually a direction correlation between the number of machines and humans involved in a task and the robustness of the BPM solution being applied to automate those processes.
The primary decision most IT organizations need to make when it comes to BPM is still whether to buy an application or build one themselves. However, even when an organization elects to buy a BPM application, there’s typically a lot of customization required. The more common the business process that needs to be automated, the better the fit a packaged application tends to be. For example, many ERP applications include tools and frameworks for automating a wide variety of business processes. The degree to which an organization attempts to customize those business processes has a significant impact on their total cost of ownership for that application.
Packaged BPM Solutions and Customization
There are still plenty of instances where organizations see value in customizing business processes to gain a competitive edge. But there’s also a lot of tension between providers of packaged applications that contend it’s not worth customizing business processes that don’t provide any differentiated value to the business. In fact, providers of packaged applications are now making the case for deploying applications in the cloud because a large swath of the business processes that need to be automated are essentially identical across thousands of organizations.
The challenge facing organizations today is defining the line between when an application automates a business process sufficiently versus deciding to pour sometimes millions of dollars of their own limited resources into creating the perfect custom business process.
The good news is that the cost of customizing a business process is starting to come down, thanks to the proliferation of low-code application development environments. The basic idea is to provide a development environment that is simple enough for someone in the business to employ rather than requiring the expertise of a professional developer. In some instances, these development tools are being bundled with the BPM platform. In other instances, organizations are opting to acquire low-code application development tools that can be broadly applied by so-called “citizen developers.”
Those capabilities are already having a profound impact on the number of organizations willing to customize a business process, says Phil Simpson, product marketing manager for JBoss, an application server from Red Hat on which BPM applications can be built.
“Citizen developers working within a line of business are using low-code tools to inject BPM into the business,” says Simpson.
In general, the overall BPM market is forecasted to grow at a compound annual rate of 14 percent, which according to Market Research Future would create a $16 billion market by 2023. That market spans tools focusing on process improvement, automation, content and document management, integration and monitoring and optimization, as well as all the IT services required to construct the actual business process.
Which tools an organization might employ depends on the task at hand. BPM frameworks span every line of business, including human resources, accounting and finance, sales and marketing, manufacturing, supply chain management, and operations and support. BPM tools and applications are typically further segmented into those intended to be used by an enterprise IT organization versus ones that are intended to appeal to small-to-medium businesses (SMBs) or a department within a larger enterprise. It’s not uncommon for an organization to adopt a BPM application in one department, while preferring to build their own custom application elsewhere in the organization.
In general, BPM, in addition to manufacturing, is being broadly adopted across just about every vertical industry segment, including health care, retail, banking and government. Among the leading providers of BPM applications are IBM, Appian, Pegasystems, Oracle and TIBCO software. As BPM becomes increasingly a foundational element of any digital business transformation initiative, the category is also attracting vendors ranging from well-funded startups to printer manufacturers such as Xerox that are focusing more on their document management capabilities.
Many organizations are especially interested in automating existing paper-based processes using, for example, mobile applications that still need to be able to print out a form, says Kevin Warren, chief commercial officer for Xerox.
“Any workflow involving paper and digital is part of our value proposition,” says Warren.
In general, the more structured a business process is, the simpler it is to automate. Most of the early success with BPM involved, for example, manufacturing processes largely based on machine-to-machine interactions. But as of late, organizations have been trying to automate customer experiences that typically require more machine-to-human interactions. The challenge those processes present, however, is that there tend to be many more exceptions to the business process rules being implemented. Organizations are now starting to invest in various forms of artificial intelligence (AI) technologies in the form of, for example, robotic process automation (RPA) to automate more complex processes. The goal is to make it difficult for customers to even know when they are engaging with a live agent versus a program that has been developed to simulate that interaction.
The more complex any given process is, the more challenging it naturally is to automate. The issue that many organizations now face is that increased competition is forcing them to automate many more processes than before. Customers are increasingly requiring products and services to be delivered faster than ever. Satisfying those demands requires organizations to automate everything from how they engage with customers to the supply chain on which they depend to provide goods and services.
Strategic application of BPM will ultimately determine how profitable any business can be at a time when fierce competition continues to drive margins down on both core products and any services attached to them. There may be resistance to having to invest in BPM given the costs involved. But over time, investments in BPM will prove for many organizations to be the ultimate difference between being able to remain in business versus becoming yet another company consigned to the scrap heap of history.